Obama could usher in a new era for solar in the US

Posted by Laura Grant on November 13, 2008
Posted in Renewable energy

President-elect Barack Obama’s increased emphasis on renewable energy could help to finally unleash the United States vast potential for solar energy, but economic difficulties may prove a barrier to some of the more expensive renewable initiatives, says information technology research and advisory company Gartner, Inc.

“Demand for solar energy remains dependent on government subsidies, because it costs more than conventional forms of electric-power generation,” said James Hines, research director at Gartner and lead analyst for solar energy technologies.

“However, the new US administration could help encourage investment in solar energy projects if it succeeds in implementing some of its plans, which is more likely with majorities in both houses of Congress.”

The increased emphasis on renewable energy and the extension of the 30 percent investment tax credit for solar projects – passed last month – could provide a significant boost to the US solar industry. It could potentially help the US to overtake Germany as the largest photovoltaic market within a few years, said Hines.

President-elect Obama’s New Energy for America plan includes:

  • A federal renewable portfolio standard (RPS) that requires 10 percent of electricity consumed in the US to come from renewable sources by 2012
  • A $150 billion investment over 10 years in research, technology demonstration and commercial deployment of clean energy technology
  • Extension of production tax credits for five years to encourage renewable energy production
  • A cap-and-trade system of carbon credits to provide an incentive for businesses to reduce greenhouse gas emissions

“The new president will face a difficult economic situation that could significantly impede his plans. Expensive government programmes will be hard to pass if tax receipts are declining and corporate earnings are depressed, even with Democratic control of Congress,” Hines said.

“It is likely that the RPS will be passed during 2009, which will provide a strong boost to US demand for solar energy. The other provisions, which require significant spending or tax incentives, might have to wait until the economy starts to recover.”


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