Talk about a disconnect in U.S. energy policy.
Over the past few years, several U.S. states have imposed mandates requiring that electric utilities operating within their borders generate a certain amount of their juice from renewable sources. And over the past few years, the federal government has cooperated by serving up a tax credit that defrays the cost of that clean power.
The state and federal policy combination explains why wind power – the most economically viable among renewable energies –has grown as it has. The past three years have been blockbusters for U.S. wind because the tax credit has been in effect. And the biggest wind-power states aren’t necessarily the windiest. They’re Texas, California, Iowa, Minnesota, and Washington–all states that have told their utilities they have to buy wind power.
Those state-level sticks are still whacking away. But with the Senate’s decision yesterday not to extend the renewable-energy tax credit, the federal carrot (at least temporarily) is gone.
Renewable-energy advocates long have conceded they’ll ultimately have to survive without direct subsidies from the feds. Now comes their test – far sooner than they had hoped.
Posted by Keith Johnson
7 February 2008
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