Could a GOP Congress Back Renewable Energy?
Republicans are throwing their weight behind solar and other clean power sources, in part to challenge the big utilities.
When the Republican Party took control of Congress after it gained a majority in the Senate in November’s midterm elections, coal stocks rallied. The leader, Bristol, Virginia–based Alpha Natural Resources, jumped 17 percent on November 5, though it subsequently fell 22.12 percent as of December 23. Does a favorable political climate for the coal sector strike a blow to alternative energy? Not necessarily. Republicans, especially those at the state and local levels, are increasingly supporting solar and other renewable energy sources as consistent with their political beliefs.
“It’s not so simple as Democrats are for [renewable energy], and Republicans are against it,” says Shayle Kann, Boston-based director of GTM Research, the analysis, advisory and consulting division of Greentech Media, a research firm focused on the renewables industry. “There has been a pretty meaningful growth of conservative support for rooftop solar, especially. The idea is that customers should have the right to choose where their power comes from, and that there should be support of policy and regulations that favor the development of third-party-owned or customer-owned solar power.”
Kann points to the formation of grass roots groups advocating for solar energy on behalf of the GOP. In 2013 former Republican congressman Barry Goldwater Jr. became chairman of Tell Utilities Solar Won’t Be Killed (TUSK) in Arizona; TUSK has since expanded its activity into Colorado, Louisiana, North Carolina, South Carolina, Utah and Wisconsin.
That same year the Atlanta Tea Party Patriots joined forces with the local chapter of the Sierra Club, a major environmental group, to form the Buford, Georgia–based Green Tea Coalition, which pushes for adoption of renewables, in part to challenge major utilities’ market power. Co-founder Debbie Dooley has said that she’s working with like-minded solar activists in Colorado, Florida, Ohio, South Carolina, Texas and Virginia.
A January 2014 survey by the Pew Research Center, a Washington-based think tank, indicates that U.S. popular support for government funding of alternative energy is high, even among Republicans. The survey revealed that 73 percent of Americans — including 58 percent of Republicans — want to see more federal backing of solar, wind and hydrogen power.
This groundswell likely has much to do with the changing economics of clean energy and the public’s growing familiarity with alternative sources that are working their way into the power mix. In 2013 renewable power capacity expanded at its fastest rate ever, according to the Paris-based International Energy Agency. Renewables made up almost 22 percent of the global energy mix that year, compared with 18 percent in 2007. The IEA also found that investment in new power capacity reached $250 billion in 2013.
Much of the increased uptake, particularly in solar, stems from lower pricing: Between the third quarter of 2009 and mid-2014, the cost of electricity generated from thin-film photovoltaic solar cells dropped from $225 per megawatt-hour to $149. In 2014 the average cost of a solar module was just 78 cents per megawatt, versus $79.42 in 1976.
But GTM’s Kann notes that the grass roots advocacy for renewables hasn’t been as evident in Congress — yet. “Partially, it’s just because there haven’t been as many policy debates that relate to this [on the federal level],” he says. “It’ll be interesting to see the extent to which that does come to the forefront, and whether the grass roots support does actually impact the federal politicians.”
The federal debates most pertinent to renewables center on tax breaks and the question of their extension. The Tax Increase Prevention Act, sponsored by Michigan Republican Congressman Dave Camp, extended several renewable energy tax credits through the end of 2014. It passed the House and the Senate in early December with ample support on both sides of the aisle.
Gregg Benson, a New York–based attorney in the tax department of law firm Kaye Scholer, says the details of the Tax Increase Prevention Act can be interpreted as reassuring or less than heartening for renewable power: It’s a good sign the bill included the renewables-focused tax credits but somewhat disconcerting that they weren’t extended for another year.
The industry will closely follow Congress’s movement on the extension of another tax break: the business energy investment tax credit (ITC), which offers incentives for solar power as well as wind, biomass, geothermal electric and other clean energy sources. The solar ITC is slated to step down from 30 percent to a permanent 10 percent at the end of 2016.
Ken Johnson, vice president of communications for the Solar Energy Industries Association and former deputy chief of staff, communications director and chief spokesman for the House Energy and Commerce Committee, says pulling back the tax breaks would harm the solar industry, which pumps about $15 billion into the U.S. economy each year, according to the Washington-based SEIA. His group will be boosting efforts to educate congressional Republicans and drum up support for alternative energy.
“We’re going to roll up our sleeves, we’re going to blanket Capitol Hill, and we’re going to let Republicans know what the investment tax credit has meant for America, and what it will mean going forward,” Johnson says.