NEW YORK--(BUSINESS WIRE)--At the Renewable Energy Finance Forum-Wall Street (REFF-Wall Street), hosted by the American Council On Renewable Energy (ACORE) and Euromoney Energy Events, top leaders from the financial industry and renewable energy sector identified the need for consistent long-term clean energy policies. Financiers and policy drivers discussed the anticipated landscape for renewable energy, while expressing concern about misconceptions regarding specific renewable energy programs and an impending gap in federal support for renewable energy projects.
“History has shown that consistent and rational policies can successfully assist the private sector in building critical industry sectors that are important to our economy and national security interests." said Dennis V. McGinn, President and CEO, American Council On Renewable Energy. “Indeed, the domestic oil and gas industry is a prime example of how consistent policies can help build a robust industry that plays an important role in both our economy and our nation's security. It makes sense to take the same approach for renewable energy. We need long-term policy incentives to create that market certainty, allowing renewable energy to scale-up, stimulating the economy, creating new jobs, and reducing debt. Polls have consistently shown that the American people see the value of clean energy technology. There is a clear disconnect between this widely-held view and many elected officials who are actively working to slow down or prevent the realization of clean energy’s benefits.”
Financial experts observed that the important focus on deficit reduction in Washington, DC has seemingly gridlocked development of a consistent long-term policy for renewable energy. Both deficit reduction and long-term renewable energy policy are critical objectives for U.S. economic and energy independence, and lack of progress is creating market uncertainty. Specifically, uncertainty abounds around the continuation of programs that have played a critical role in advancing renewable energy deployment, encouraging private sector investment and creating jobs, including the 1603 Grant in Lieu of Investment Tax Credit, the 1703 and 1705 Loan Guarantee Programs, Production Tax Credits (PTC) and Investment Tax Credits (ITC).
"Many people don’t realize that renewable energy incentives more than pay for themselves and provide many long-term benefits,” said Kevin Walsh, managing director and leader of power and renewables at GE Energy Financial Services. “For example, we estimate that wind projects completed in 2010, which used the U.S. Treasury grant or federal Production Tax Credit, had a net present value of roughly $100 million for the U.S. Treasury.”
While emphasizing the need for a consistent long-term renewable energy policy to create a stable investment climate, financial experts also agreed that certain renewable energy sectors could soon compete on their own—without subsidies—citing accelerated predictions for solar energy to reach grid parity on a non-supported basis, and wind energy projects competing on price with natural gas or even coal-fired generation. Recent volatility of fossil fuel prices is an indicator of future energy instability, and will likely accelerate renewable energy competing directly on costs.
The group also discussed the importance of proposed policies to support the investment environment in the longer term, including a national renewable energy standard, a Clean Energy Deployment Administration (CEDA or “Green Bank”) and pending climate and related energy legislation.
“A number of commercial renewable energy technologies are rapidly approaching the point where they are cost competitive with traditional energy sources, such as oil and gas, that have enjoyed long-term, consistent government support,” said Patrick Eilers, Managing Director, Madison Dearborn Partners, who serves on the Board of Directors for U.S.-based wind energy company First Wind and on the Executive Committee of the United States Partnership for Renewable Energy Finance (U.S. PREF). “It would be unfortunate for U.S. global competitiveness if we are not able to reach consensus and provide legislative certainty when we are close to grid parity for renewables. Legislation that created a stable investing environment through 2020 would provide the catalyst for the U.S. renewable market to finally reach full cost competitiveness.”
“We are well aware that Washington's attention is focused elsewhere,” said Neil Auerbach, Executive Committee member of U.S. PREF, and Co-Managing Partner, Hudson Clean Energy Partners. “Although both sides of the aisle agree on the importance of renewable energy and understand the need for a long-term consistent policy, there is little hope for progress in the short-term due to the debate on deficit reduction. At Hudson, we believe the country, as well as the renewable energy industry, would be better off with a less generous policy framework, but one with long-term visibility, say for five or ten years. We can live with less if we get it right. On the line are thousands of jobs, gigawatts of clean energy capacity and billions of dollars in investment in the next five years. The stakes are high and we need to be able to get these projects to the finish line.”
Across the board, consensus from REFF-Wall Street speakers and attendees was overwhelming—a consistent long-term policy on renewable energy will be critical to the sector’s success. While some areas of the industry are on course toward cost parity with traditional fossil fuel sources, the instability inherent to an absence of policy is too great a risk. Given the astounding success of consistent policy decisions supporting the traditional energy industry, it is time for the federal government to apply the same parameters to renewable energy to ensure the attainment of its promise.
The American Council On Renewable Energy (ACORE), a 501(c)(3) membership non-profit organization headquartered in Washington, DC, is dedicated to bringing renewable energy into the mainstream of the U.S. economy and lifestyle through research and communications programs and membership committees. ACORE co-organizes the REFF-Wall Street and REFF-West Finance Conferences, the RETECH All-Renewables Energy Conference and Exhibition, the Phase II National Policy Forum in Washington, DC, and hosts both domestic and global policy events furthering the mission of renewable energy. Additional information is available at www.acore.org.
About Euromoney Energy Events:
Part of Euromoney Institutional Investor PLC, Euromoney Energy Events is a leading international events company that organizes high profile conferences for clean energy professionals worldwide. Our diverse portfolio of events brings together senior delegates from the renewable energy and clean tech industries with investors, financiers and other professionals. For more information please visit www.euromoneyenergy.com