Clean Energy Debate Hurdles facing U.S. & its States

In a 5-4 decision, the Supreme Court of the United States recently overturned campaign finance laws. This encourages more direct spending by corporations, unions and other special interest groups. The Supreme Court ruling removes restrictions for federal campaign financing from these special interest groups and gives them the same rights to freedom of speech as citizens. According to a Needham & Co. estimate, $2.8 billion will be spent on issue-oriented influence or lobbying in the U.S. this year.

Although this may be a boom for corporations, marketers and media agencies, the decision will tilt the balance of power in formulating new legislation. The results of massive spending and its impact on the health care debate have been obvious. The Washington Post reported that corporations spent an average $1.4 million per day to stall the President's health care legislation, which is still being dragged out in Congressional events such as today’s Health Care Caucus. Constant stalemates supported by wealthy incumbent corporations in power over the status quo will lessen the possibility for change on many issues across the board including climate change and the development of a clean energy economy.

Public debates have already been confused by misinformation on health care and other major issues, and the political culture will be even more distorted by corporate spending in the future. Under the new ruling, facts will be lost to an even higher degree through a plethora of false television advertisements and lobbyist events to protect future profits and market share. Therefore, with unlimited spending on major policy issues, misinformation campaigns by Big Oil, Big Coal and other special interests will be even more aggressive, potentially brainwashing the public who may have initially favored clean energy and carbon emissions reduction policies.

In the case of renewable energy development, the Recovery Act has been an obvious boost; however, stimulus funding is essentially a temporary lift to an industry that requires substantial long-term legislative support to overcome the even more powerful entrenched fossil fuel industry. The Hill.com reports that the joint DOE/Treasury grants in lieu of tax credit program implemented last year under the Recovery Act may end too soon to benefit some planned solar plants. In many cases, construction must be started this year in order to benefit from the program, which is a stiff challenge for solar projects that have been delayed due to permitting issues for large-scale capital projects and transmission, especially for ones on federal land. The solar industry has asked Congress to extend the deadline to begin construction beyond 2010, but an extension may not be forthcoming.

Part of the current problem for renewable energy deployment in the U.S. is lack of national renewable portfolio standard (RPS), as in many other countries, requiring Congressional approval, especially one linked to a greenhouse gas emissions cap-and-trade system. Global companies and outside investors cannot be expected to keep up with emerging policies for 50 different states without any national standard, where one state has a mandate or simply a goal of 15 percent renewable energy by 2015 and its neighboring state has a higher percentage, including differing energy sources, or no requirement at all. The lack of a consistent national RPS policy complicates investment and deployment strategies and lessens the overall visibility of an eventual market opportunity.

Furthermore, without a national RPS there will be imbalanced market and overall less growth in the renewable energy sector, since many states will not have a major incentive to match surrounding states or the ability to overcome wealthy fossil fuel lobbyist organizations. However, if a national RPS or cap-and-trade system is ever enacted, the states which fell behind the curve and never progressed in building a clean energy infrastructure and accompanying power grid system or smart grid, will lack the know-how and have a mountain to climb, as their utilities may be forced to purchase specific renewable energy at a premium from out-of-state power providers, driving up the cost for all energy users. What’s more, states without state RPS mandates will lose out on the synergistic spillover effect that clean energy deployment has, which is the attraction of the supply chain (jobs) to the customer base, as in the case of solar manufacturing operations opening up in California- a state with the most aggressive state RPS in the country.

Arizona has a mandate requiring 15 percent of its energy to be generated from renewables by 2025, which is moderate compared to about 29 other states with requirements. However, its House Committee voted 5-2 to overturn the state's renewable energy mandate this week. The bill that came out of committee, House Bill 2701, will be presented to the full House and is designed to strip regulators of their authority to impose renewable energy mandates; thus, potentially letting the status quo to remain intact where nearly half of its power is derived from coal. The bill lumps nuclear power in with renewable resources and prohibits any utility from being forced to buy "alternative" energy. The National Renewable Energy Lab has conducted numerous studies showing that Arizona has the highest solar availability (potential) in the country, making the sun ones its valuable resources, including the tourism and snow bird benefit, similar to the abundance of oil in Texas.

After Arizona finally was able to attract a major solar manufacturer to the Phoenix area for the first time in its history, after passing related incentive legislation, and its governor, Jan Brewer, touted the state as the next “solar capital of the world,” solar energy giant SunTech Power Holdings, based in China, is now reconsidering its plan to build its plant in Goodyear, AZ if the bill is passed, according to the Phoenix Business Journal. And that could be how the cookie crumbles, as the state and the country as a whole, drowns in debt and economic woes without being able to see the promise of future economic growth.