Here's Why the US Has One-Fourth the Renewable Energy of Germany: Inconsistent Policy


photo: James/CC BY-SA

Over at Climate Progress, Senate Majority Leader Harry Reid says he's "not confident" that Congress will be able to extend the production tax credit for the wind power industry, due to a members of Congress "making a concerted effort to thwart development" of clean energy.

Which illustrates nicely the high contrast distinction between German policy on renewable energy--where now 20.8% of ielectricity comes from renewable sources, roughly 17% if you exclude hydropower--and that in the United States. In the US, if you exclude hydropower, just about 4% of electricity comes from renewable sources. Strong, consistent and clearly spelled out support for renewable energy in Germany has brought about a fifteen percentage point increase in renewable energy installation over the past decade.

Though the US does have a good deal of renewable energy installed in terms of capacity--the US is in the top ranks in many renewable energy sources, though it leads in none--as a percentage of total electricity generation it's pitifully small, growing in fits and starts as policy swings from one direction to another.


When the PTC lapses, wind power installation stalls. Image: Union of Concerned Scientists

The Climate Progress piece explains the effect that the production tax credit has had on the wind power industry:

The PTC, which provides wind project owners 2.1 cents per kilowatt-hour of electricity produced, is a fundamental incentive for the industry. However, unlike permanent credits embedded in the tax code for oil and gas producers, the PTC is only extended every couple of years. That creates immense uncertainty in the sector in the lead-up to the expiration.

If the PTC expires, the wind industry would see a massive decline in installations, effectively choking one of the fastest-growing energy sectors in the country. During previous lapses in the tax credit, national installations fell by between 70% and 90%.

The PTC is set to expire at the end of 2012. Because it can take years to plan large wind farms, many projects are delayed or abandoned if a developer is unsure about completing the facility in time to qualify for tax credits.


More on Renewable Energy
20% Of Germany's Electricity Now Comes From Renewable Energy
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Tags: Renewable Energy | United States | Wind Power

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