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Austerity and renewable energy

November 3, 2010

By Drs. Robert & Sonia Vogl
President and Vice President
Illinois Renewable Energy Association

Enthusiasm for energy efficiency and renewable energy remains high in our educational system as colleges and universities win federal and state grants to secure equipment, establish programs and benefit from increased enrollments of students anticipating employment in the expanding green economy. The educational programs are developing a skilled workforce for an expanded renewable energy industry.

Those of us who lived through the solar enthusiasm of the Jimmy Carter administration, which ended with the flood of cheap oil stemming from the energy policies of the Ronald Reagan administration, are left to ponder the extent to which the current push for renewable energy will survive the arrival of a Congress that is likely to be less willing to support continued subsidies for social programs and alternative energy sources.

If austerity prevails, cutting government debt and programs will be a major focus, leaving the question regarding the extent to which federal subsidies will continue to be directed toward stimulating jobs in the green economy.

An early indication of the importance being placed on the growth of the renewable energy industry might be found in the recommendations of the federal Deficit Reduction Commission, due to be released Dec. 1. Another important indicator is whether the federal grant program is extended beyond the existing end-of-the-year deadline.

Chris Bolman, a senior analyst with Photon Consulting, LLC, sees two main challenges facing the industry. One is the availability of capital to finance renewable energy installations. If interest rates rise as expected, financing the industry will become more difficult. A second is a high level of government debt.

In Europe, Germany’s high rate of pv adoption is seen by some officials as economically unsustainable, which will likely result in a reduction in growth from an anticipated increase as high as 9 megawatts of installed capacity down to 5 megawatts. Greece, despite dire economic prospects, is attempting to expand efforts to install renewable energy systems.

In the United States, solar electricity is the fastest-growing source of new energy. The accelerated rate of growth remains dependent on federal, state and local funds to reduce the initial high cost of a system. State renewable energy portfolio standards also help to drive up demand for renewable energy sources.

One conservative think tank has called for a national renewable energy portfolio standard. The liberal Center for American Progress Action Fund fears that, along with five other states, Illinois’ RPS could be threatened depending on election results.

Over the past decade, Illinois has developed programs that have stimulated renewable energy and efficiency installations. It was recently announced that limited funds are available to support the state’s renewable energy rebate program for the fiscal year ending next June.

While the push for deficit reductions is likely to intensify, so will the push for job opportunities. Given the two opposing forces, it seems highly unlikely that damage to the renewable energy industry will be as widespread as it was during the Reagan era.

Drs. Robert and Sonia Vogl are founders and officers of the Illinois Renewable Energy Association (IREA) and coordinate the annual Renewable Energy and Sustainable Lifestyle Fair. The Vogls and the IREA are members of the Environmental Hall of Fame. Dr. Robert Vogl is vice president of Freedom Field, and Dr. Sonia Vogl is a member of Freedom Field’s Executive Committee. The Vogls consult on energy efficiency, renewable energy and green building. They have 3.2 kW of PV and a 1 kW wind generator at their home. Forty acres of their 180-acre home farm are in ecological restorations. They are active in preserving natural areas and are retired professors from Northern Illinois University. E-mail sonia@essex1.com.

From the Nov. 3-9, 2010 issue

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