Clean Energy Victory Bonds: The Path to an American Renewable Energy Revolution
Over the past decade, the United States has seen its advantage in the clean energy sector go from substantial to non-existent. Though America was one of the first nations to embrace the idea of solar power (think Jimmy Carter and his PV panels on the White House), political opposition kept renewable energy technologies from making a significant impact on our national energy portfolio. But while lawmakers here were debating the merits of renewable energy, countries across the globe, particularly in Europe, began to take notice and build their own clean energy industries.
Over the course of 2012, Germany, Spain and Italy have all been producing over 20 percent of their electricity from renewables, while the United States continues to hover around 6 percent. Germany in particular has dominated the renewable energy discussion, thanks in large part due to their Renewable Energies Act which went into effect in 2000. Since then, Germany has incrementally increased their solar, wind and biomass efforts that now compromise 25 percent of their total electricity use. They have their sights set on producing 30 percent by 2020 and 80 percent by 2050, indicating their willingness to pursue ambitious energy goals.
Progressive policies and firm leadership are spurring Germany’s clean energy growth. Feed-in tariffs ensure that all renewable energy transmitted to the grid gets used, ensuring that there is a fixed price for these energy sources in an otherwise volatile industry. This price security enables renewable companies to get a fair chance against bigger fossil fuel companies. This type of system has been successfully implemented in countries like China, Japan, Spain, Italy and the UK in recent years.
Despite this positive evidence, the United States has yet to make this kind of commitment to renewable energy. Even though Germany receives only half as much sunlight as the US, it produces 23 times more solar power per capita. States like Arizona have the natural resources to produce thousands of megawatts of power but the presence of residential swimming pools still outnumbers solar panels 1000 to 1.
Political disagreements have been partially responsible for the lack of renewable growth as inconsistent legislation is modified every few years. Companies are having a hard time securing funding when laws are subject to change or elimination at any moment. Currently, the battle over the Production Tax Credit has caused businesses (particularly in wind power) to start laying off workers in anticipation of its expiration. This uncertainty has already caused foreign investors to shift their green projects to Europe instead of the United States.
However, there are still a few indications that the clean energy revolution is beginning to take hold in the United States. The first three quarters of 2012 saw 4728 megawatts of wind power added to the grid, which was more than the total wind power capacity from just a decade ago. Solar has experienced a similar shift, with capacity having doubled since 2009. In total, renewable electricity generation (excluding hydropower) has increased two fold in the past four years.
In order to keep these modest momentum gains, the United States needs to create a viable environment for renewable energy companies. This means guaranteeing prices and credits for producers and incentivizing the production of clean electricity. The Clean Energy Victory Bonds Act of 2012 includes provisions for all of these energy sources and more. European countries were able to make use of their relatively limited renewable energy resources by simply investing in the technologies and companies that were producing clean fuel. Clean Energy Victory Bonds would create a similar effect for the US clean energy industry by supporting clean energy and giving companies a competitive price on their pollution-free electricity.