With some federal supports for solar energy projects due to expire on Dec. 31, 2010, and both Democrats and Republicans under the gun to downsize the federal budget, members of the California Energy Commission appear to be in a last-minute push to approve as many solar thermal energy projects as possible.
Federal funding for solar projects comes under the American Recovery and Reinvestment Act of 2009, or ARRA (also called the stimulus), which provides financial support for renewable energy projects either as a 30-percent investment tax credit, or – in cases where the company is a start-up and their tax burden is insufficient – as an actual 30-percent cash payment. This expires on Dec. 31.
To qualify, project developers either have to start construction before the deadline or spend 5 percent of construction costs, so the push now involves seven utility-scale projects approved since August, including NextEra Energy, Inc. and Tessera. Both still require Bureau of Land Management approval.
The push is good for California’s greenhouse gas (GHG) agenda and its renewable portfolio standard, or RPS, which Governor Arnold Schwarzenegger upped in October to 33 percent by 2020. The GHG provisions were released by the California Air Resources Board on October 31, and establish cap-and-trade regulations with fixed limits beginning with utilities and large industrial combustion plants.
Writing the day of the election, it’s easy to anticipate that the passage of Prop 23, which aims to suspend AB 32, California’s Global Warming Act of 2006, would prompt Californians and a newly seated California government to riot in the streets – California citizens because Prop 23 signals the end of what climate legislation the state has been able to eke out, and politicians because their success or failure depends on the mood of the people.
Prop 23 has been very well-funded, and the threat – of increased costs of up to $4,000 per year per family if it fails – has likely reached cash-strapped Californians facing one of the highest unemployment (and foreclosure) rates in the nation.
Hopefully, sanity and the “California Green” spirit will prevail. If not, breaking ground and spending a little money will be the smallest obstacles these solar projects face.
Photo via Flickr CC by Bart Speelman