NEW ENERGY TAX CREDITS WILL CREATE JOBS, WEALTH
Take a hypothetical nation. Call it Freedonia. Suppose Freedonia has just suffered the bursting of an economic bubble in its housing sector. As a result, Freedonia’s economy is reeling. Many Freedonian economists are calling it the worst economic crisis to hit the country since its Great Depression many decades before. Got the picture?
Now, suppose Freedonia is on the cusp of a revolution in its energy sector. Its Old Energies are running out and becoming expensive. But Freedonian scientists, engineers and innovators have come up with ways to harness the wind and the sun to provide Freedonia’s citizens with all the energy they will ever need. There’s only one small sticking point: The Old Energies are entrenched in Freedonia’s economic system. Freedonia’s legislators must create some policies and temporary subsidies that will even up competition and allow the New Energies to get a start.
The subsidies will be a little costly but they can be paid for in the short run by shifting some unnecessary subsidies away from the immensely profitable Old Energies. In the longer run, the tremendous revenues that will come from huge investment and hundreds of thousands of jobs in New Energies will cover the cost of the subsidies.
Is there any possible reason Freedonian legislators wouldn’t LEAP at such an opportunity? Especially with their economy failing?
Note to the U.S. Congress: Welcome to Freedonia. Now vote “yes” on the energy bill and go home.
Economic Impacts of Extending Federal Solar Tax Credits, a new study from Navigant Consulting, looked at the economic impacts of extending the U.S. solar energy industry’s investment tax credits (ITCs) through 2016 and found such legislation could result in 1.2 million new, high-quality domestic job-years in manufacturing, construction and engineering, and in the roofing, electrical, and plumbing trades. This is 440,000 direct, indirect, and induced jobs.
Extension of the credits would also increase domestic solar energy industry investment by $232 billion and add 28 gigawatts of solar energy capacity.
Studies of the wind industry indicate a drastic falling off from the unprecedented economic boom of the last 3 years can be expected if its production tax credit (PTC) is not extended.
Freedonia’s tax credits, er, no, the U.S. tax credits expire December 31, 2008. This week could be the last time Congress considers their extension.
Rhone Resch, president, Solar Energy Industries Association: "In the next week Congress will be voting on energy tax legislation and we strongly urge Congress to seize this opportunity to extend the solar investment tax credit for 8 years…Congress can provide an immediate boost to the floundering U.S. economy by creating hundreds of thousands of jobs and injecting billions of dollars of new investment capital into the economy, while at the same time driving down energy costs for consumers…"
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New Study Shows Extending Solar Tax Credits Will Create Jobs, Increase Investment; If Congress passes bill, 440,000 permanent jobs will be supported by the U.S. solar energy industry by 2016
September 15, 2008 (PR Newswire/COMTEX via MarketWatch)
WHO
Navigant Consulting, Inc. (Jay Paidipati, Managing Consultant); Solar Energy Industries Association (SEIA) (Rhone Resch, president)
WHAT
Economic Impacts of Extending Federal Solar Tax Credits, a new study from Navigant, shows a dramatic increase in solar energy industry jobs and investment would result from a long-term extension of the investment tax credits (ITCs) by the U.S. Congress.
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WHEN
The Navigant study looked at an 8-year extension through 2016 because the best congressional legislation, so far rejected, has included an extension of that length.
WHERE
- The study looked at the U.S. solar energy industry.
- It indicated that the biggest economic benefits would be in California, Florida, Arizona, New Mexico, Nevada, New Jersey, Massachusetts, New York, Oregon, and Washington. - The economies of Pennsylvania, Michigan, Ohio and the rest of the Great Lakes region, areas hard hit by the decline in automotive and traditional manufacturing industries jobs, would also grow significantly with an ITC extension.
- SEIA is based in Washington, D.C.
- Navigant is based in Chicago.
WHY
- Navigant evaluated all 3 major forms of solar energy technology: (1) Photovoltaic (PV) (flat panels for roof-mounting or utility-scale arrays); (2) Concentrating Solar Power (CSP) (mirrors or lenses that concentrate sunlight’s heat to boil liquid to drive a conventional steam turbine to generate electricity); (3) Solar Water Heating (SWH) (sunlight heating water).
- An 8-year extension of the ITCs would produce 1.2+ million high-quality job-years, or 440,000 permanent new jobs.
- It would also increase investment in the U.S. solar energy industry by $232 billion.
- Much of the direct growth in permanent U.S. jobs would be in domestic manufacturing, construction and the trades.
- By comparison, there are currently 79,000 direct employees in the coal mining industry and 136,000 direct employees in the oil and gas industry.
- Because solar energy manufacturing is near its markets, ITC extension would create manufacturing and installation jobs in all 50 states.
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QUOTES
- Rhone Resch, president, SEIA: "The solar energy industry creates jobs that are the foundation of our economy -- jobs for manufacturers, construction workers, engineers, roofers, electricians, and plumbers. These jobs are needed now and Congress is in a position to extend the ITC and ensure that these jobs are created here in the U.S."
- Jay Paidipati, Managing Consultant, Navigant: "There is the potential to create significant U.S. employment and investment opportunities…An 8-year extension of the ITC would allow the market to maintain or possibly exceed its current growth rate."
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