For its part, the solar industry employs more than 80,000 people in the United States and has created over 15,000 jobs during the past two years. According to a report last year by Navigant Consulting, the solar energy sector alone will create 440,000 permanent jobs and spur $325 billion in private investment by 2016 with the right tax policies in place.
Even more importantly, the jobs created in the wind and solar industries drive U.S. productivity and enhance our global competitiveness.
Last year, the wind industry installed a record 8,300 megawatts of capacity in the U.S., bringing total wind capacity in the country to about 25,000 megawatts. As a result, for the first time, the United States now leads the world in installed wind power generating capacity. The U.S. solar industry is no slouch, either. Last year, for example, it nearly doubled the growth of solar photovoltaic installations.
Maintaining Growth and Leadership
So how can we keep this momentum going? How can we keep these two vibrant renewable energy fields from stalling?
Like many others in the solar and wind industries, we believe that a refundable tax credit is a viable solution that would have a significant and immediately positive impact here.
Why?
Because the refundable tax credit would go directly to the solar and wind developers and would be a financeable arrangement; and because it would simplify project financing, lessen industry volatility and attract much-needed early-stage technology investment.
Talking Dollars and Cents
The refundable tax credit also makes sense from a dollars-and-cents point of view. Non-refundable tax credits can reduce a company's tax liability to zero – but not below. That means solar and wind startups, many of which take years to become profitable, may not have enough taxable income to take full advantage of the credits. Refundable tax credits, on the other hand, can drop a company's tax liability to less than zero. That means a wind or solar startup can count on a check from the government to help them get going. After that, it's all in the market's hands.
Before the economy fell apart, venture capitalists or Wall Street investment banks typically provided this early-stage funding to wind and solar developers, but now, given current market conditions, that is not likely to continue, so Washington DC has an opportunity to step in and play a very constructive role with role with refundable tax credits as part of the economic stimulus plan.
Keeping the Eco Engine Running Smoothly
The hype and hope surrounding clean technology has been so overwhelming that you'd think the green energy machine was a Maserati. But even a Maserati needs an oil change and tune up now and then in order to deliver on its high-performance promise and potential.
And that's exactly where we are right now with the sustainable industry revolution.
So, in that vein, consider the refundable tax credit for solar and wind as a mere lubricant that will keep the eco engine running smoothly and profitably for generations to come.
Michael Butler is Chairman and CEO of Seattle-based Cascadia Capital, LLC, a national investment-banking firm that is helping sustainable industries finance the future; Jamie Boyd is a senior vice president at Cascadia.
The above opinion piece is from independent writers and is not connected with Greentech Media News. The views expressed here are those of the authors and are not endorsed by Greentech Media.
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