How do the revised rules in the Bipartisan Budget Act of 2015 affect you and your business?
Tax credits for the wind industry are in place through the end of this year, and a large government tax-incentive program for solar projects is set to expire in 2016.
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“Subsidies are in the cross hairs of legislators,´ said Quayle Hodek, chief executive of Boulder-based Renewable Choice Energy, which provides renewable energy credits/certificates. “How they (subsidies) will be phased out will play a big role. Phase-out needs to be done in an orderly reduction. We are competing directly with fossil fuels. It would be good to do away with those, too,” referring to tax breaks oil companies receive.
The topic of how fast renewables are being adopted and the fate of government funded tax credits, incentives and rebates for renewable energy dominated the discussion Tuesday at the Boulder County Business Report’s Clean-Tech CEO Roundtable at the office of EKS&H in Boulder.
“Subsidies are intended to stimulate industry, and that’s what they’ve done for the solar industry,´ said Tom Sweeney III, chief operating officer for Boulder-based Clean Energy Collective LLC, which builds community-owned solar gardens. “But the industry still relies on subsidies to move people and businesses toward adoption.”
Hodek believes the industry will be able to sustain itself in the long term because of the groundwork laid with the help of incentives, but added companies in the industry must do a better job of educating the public on the advances that have been made.
“Solar equipment has improved as the cost has come down,´ said Bob Schaefer, CEO of Boulder-based Also Energy LLC, which provides energy-monitoring systems for renewable energy manufacturers, producers and developers interested in commercial wind and solar. Schaefer said there are places in the world where solar is less expensive, pointing out that 10 percent of the world’s solar market is in the United States. “China, Germany and Italy are leading the way,” he said.
Amory Host, CEO of Main Street Power Co. in Boulder, said the 1603 Treasury Program, which provides solar project developers to more easily monetize existing tax incentives, has been a big help. But it is set to expire in 2016. “It did what it was supposed to do – initialize a new industry.” Declining solar costs have helped his company as well. “Over the last four years, there has been about an 80 percent drop in panel pricing, helping lower the cost of installations,” he said.
Main Street Power aggregates engineering, financing, procurement, construction and management to develop solar energy projects. It owns and operates 1,000 solar sites across North America that combined generate 40 megawatts of power.
But the industry still is facing obstacles in soft costs such as financing and obtaining permits when acquiring land for building installations, Sweeney said. “They (permits) are intended to protect the public good, such as open lands, aesthetics and impact on residents,” but they drive the cost up in terms of time and human capital. “We’ve had to go before 17 different agencies on one project to receive a permit,” he said.
One of the keys of success is how companies go about deploying their products and services, said Jeff Bisberg, founder of Albeo Technologies Inc. in Boulder, a manufacturer of LED lighting products, which recently was acquired by GE Lighting.
“LED is on a similar trend as solar,” he said. “It is on a growth curve. … It’s tech-driven and working toward being cost-effective.”
He said a troubling sign is the decline in venture capital funding for clean-tech startups. “That’s where the next generation of technology is going to come from.”
The recent drilling boom for natural gas using hydraulic fracturing techniques is dropping the price of natural gas and is affecting the renewable energy industry.
“With natural gas prices down, utilities go and build more natural gas plants,´ said Hodek. “Electric prices go down. But that’s a short term phenomenon. It makes a difference for us, it makes planning harder.”
Participants agreed that what seems to be getting lost in the debate of renewables or fossil fuels is the environmental factor. They said all businesses are concerned with the bottom line, but less is being said about the positive impacts renewables can have on the atmosphere and human lives.
Bisberg pointed out that carbon dioxide levels recorded earlier this month surpassed 400 million parts per million, considered a “tipping point by some in the scientific community pertaining to climate change and the level of the sea.
Hodek said, “The challenge is to be environmentally responsible, but do it in a way to keep our businesses running.”
Accounting firm EKS&H and law firm Berg Hill Greenleaf & Ruscitti LLP co-sponsor the monthly roundtables.