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Consistent policy is key to competing with other countries

Consistent policy is key to competing with other countries

The following post replies to a question from National Journal to its "energy experts" list.  The question was as follows:

Is America Losing the Clean Energy Race?

Is the United States losing to countries like China in the global race to develop clean-energy technologies?

One top House Republican, Cliff Stearns of Florida, suggested that America has already lost. He told NPR earlier this month, “We can’t compete with China to make solar panels and wind turbines.” Last week, a coalition of U.S.-based solar manufacturers filed official complaints with the Obama administration and the International Trade Commission alleging that China is illegally subsidizing renewable-energy products and effectively gutting America’s solar-energy industry.

The downfall of Solyndra, the federally backed solar manufacturer that is now at the heart of an FBI investigation and a congressional probe led by Stearns, has thrust to the forefront a debate over America’s place in the global clean-energy race. Energy analysts say Solyndra’s photovoltaic solar panels, which did not use silicon, could not compete with cheap silicon panels from China.

Is Stearns right when he says the United States can’t compete with China on wind and solar technologies? What can Congress and the Obama administration do to spur development of domestic clean energies? What should the private sector do? How have things changed since we last asked this question in August 2010?

 

The U.S. is very emphatically NOT losing to China in wind power. However, we are rapidly approaching a fork in the road, where decisions Congress makes will determine whether the enormous progress America has made in building a domestic industry continues or is rolled back.


The numbers tell the story:

– Wind turbine installations in the U.S. increased more than tenfold over the past decade, from a total of 2,650 megawatts (MW) at the end of 2000 to 40,181 MW (enough to power the equivalent of 10 million homes) 10 years later.

– In recent years, wind has muscled its way into the electric power mainstream. Wind energy’s cost has been reduced over 90% since 1980, driven by a continuing stream of game-changing technology advances. Utilities are increasingly choosing to rely on wind, recognizing its ability to guarantee low electricity rates for the long term. In fact, wind power has provided 35 percent of all new electric capacity installed in America over the past four years, more than coal and nuclear combined.

– Even as domestic installations of wind turbines were expanding dramatically, the domestic content of those turbines grew even faster–from 25 percent prior to 2005 to 60 percent today. As the nonpartisan Congressional Research Service (CRS) recently found, American wind manufacturing facilities have kept pace, growing from as few as 30 in 2004 to nearly 400 in 2010. Overall, wind energy supports between 2,000 to 3,000 jobs in Rep. Stearns's Florida and 75,000 across the U.S. As the CRS commented, “Wind turbine manufacturing is at the core of the multifaceted wind power industry. Because of the use of castings, forgings, and machining, turbine manufacturing is a significant contributor to U.S. heavy manufacturing.”

The bottom line? Clean, homegrown American wind energy is not only a manufacturing market that America can compete in, it’s a market that we are winning – with the support of a key federal tax incentive.

The federal wind Production Tax Credit, wind power's primary incentive, has been allowed to expire periodically since its inception in 1992, creating a boom-bust cycle. When taxes on the industry have increased, wind energy installations have dropped as much as 93%. Extending the PTC will help wind power become increasingly cost-competitive and keep generating badly needed income and taxes for rural communities. Imposing a substantial tax increase on wind will roll back the progress America has made in diversifying our electricity generation portfolio with this clean, affordable, homegrown energy source.

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