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Local Solar Could Solve ‘Massive Supply-Demand Imbalance’ in Renewable Energy Financing

In the next two years, the U.S. may get a lot less solar and wind power than it could.

It’s not a shortage of solar panels or the cost of turbines.  Rather, it’s a problem of the perverse nature of federal incentives for renewable energy.  Right now, the owner of a solar or wind energy project can get a federal tax credit based on the value of the project or the electricity it produces.  But many owners don’t have enough tax liability to make use of the entire credit, and their search for a “tax equity” partner has created a logjam in the renewable energy market.

As reported in Greentechmedia,

CITI calculates there is a need in solar for $10 billion to $12 billion in tax equity for 2012 through 2014,  but not more than $5 billion in tax equity is available. That, Salant said, is “a massive supply-demand imbalance” that is not “going away anytime soon.” [emphasis mine]

The following graphic (from the article) illustrates:

A big part of this big money problem is a focus on big projects (and technologies that can’t economically be done at small scale):

“PV can be done on a much smaller scale and be economic, and a large project can be done in phases. It’s a lot easier to finance $250 million or $500 million than it is to get $3 billion all at once.” [Concentrating solar power] requires vital economies of scale “so you’ve got to raise $2 billion all at once. That’s a lot harder to do than to raise $500 million four times.”

That’s a small-scale solution to a big problem.  There may be a handful more folks who can invest $500 million than $2 billion.

But there are millions more Americans who could invest a few thousand dollars in community-based solar and wind power.  In 2009, American taxpayers cumulatively paid $865 billion in federal income taxes.  If just 1 in 100 could invest in a renewable energy project, it would nearly quadruple the tax equity market (from $3.2 billion to ~$12 billion).  And since 1 in 3 Americans will be able to get electricity from rooftop solar for less than their utility provides in the next decade, policy makers should find a way to open the small investor floodgates

The answer is community-based solar and wind projects, for three reasons:

  1. Economies of scale (without excessive size)
  2. Smaller investment increments (financed with bank loans and paid back with energy savings)
  3. Much greater political support

But there are three policy solutions needed to enable community power:

  1. Community net metering – to allow project owners to share the project’s electricity output.  Right now, most state policies require utilities to allow net metering, but only for a solar or wind project on your own property.
  2. Simplified securities law – to make community-based projects easier.  Right now, there’s little difference between setting up a mutual fund and setting up a community solar project, and both take a lot of lawyers.  (Learn more in this report)
  3. Smarter federal tax incentives – to allow community-based institutions to host community-based projects.  Non-profits, cooperatives, cities and counties are logical entities to build projects, but they can’t (easily) use federal tax incentives for solar and wind power.  This raises the stakes for problem #2.

Some of these policy solutions are already in play.  As many as eight states already offer community net metering.  The federal 1603 cash grant (now expired) was one of the best tools for community-based projects (like this one); President Obama has proposed another solution.

The U.S. could spend the next few years letting wind and solar power development lag because of artificial financing constraints.  Or policy makers could use two or three carefully crafted tools to open the floodgates to a massively democratic investment in local, clean energy.

This post originally appeared on ILSR’s Energy Self-Reliant States blog.

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House Committee Votes to Allow Illegal Loggers to Pillage World’s Forests

Turning the Page on Rainforest Destruction: Children’s Books and the Future of Indonesia’s RainforestsToday, the U.S. House Natural Resources Committee voted to allow illegal loggers to undercut the Lacey Act by allowing them to pillage the world’s forests.  The vote was close as a bipartisan group of Representatives voted against the bill that would gut the Lacey Act.  Unfortunately, by a 25-19 vote too many House Members still took the side of illegal loggers that pillage forests around the world, utilize slave and child labor, decimate wildlife, drive deforestation that is causing global warming, and undercut American companies and workers. This bill by Representatives Blackburn (R-TN), Bono-Mack (R-CA), and Cooper (D-TN) – offered by Rep. Flemming (R-LA)—would gut the Lacey Act.  The Lacey Act has been playing a critical role in helping to stop deforestation and ensuring that American companies and workers that produce sustainable products can compete on a level playing field.

All the Democrats voted no, one Republican voted no, two Democrats and one Republicans didn’t attend.  For the list of Members that deserve thanks and which ones should go on the wall of shame see below.*

The Lacey Act is a critical tool in combating global deforestation.  The premise behind the amendment to the Lacey Act is pretty straightforward – it is illegal to import and trade in illegal timber.  Companies importing wood and wood products into the U.S. must verify that they are buying that material from legal sources.  So if a company imports wood from Brazil that wood must be cut, produced, manufactured, etc according to Brazilian law or it would be deemed illegal according to the Lacey Act.

The Lacey Act doesn’t cover every law in the exporting country.  The Act’s specific language, and legal precedent (this Act has a 111 year old track record), focus on “conservation” laws.  The law is also based on the premise that importing companies need to ensure that their supply chain meets the requirements of the Act.  So if you are IKEA, Home Depot, WalMart, or a maker of musical instruments that imports wood and wood products into the U.S. you must take the necessary steps to ensure that your suppliers are complying with the law in the country where the wood is sourced.  That is just common sense as no company wants to encourage illegal activity.

Bill that passed would gut the Lacey Act.  The Committee voted on a bill from Rep. Marsha Blackburn (R-TN), Rep. Mary Bono Mack (R-CA), and Rep. Jim Cooper (D-TN) – the RELIEF ACTas amended by Rep. Flemming (R-LA). [Here is analysis of the implications of the RELIEF Act.]

The bill that passed would allow illegal loggers to keep their ill begotten gains, would eliminate the requirements of the Lacey Act for “non-solid woods” (e.g., pulp and paper) which is one the main sources of illegal logging, and would strip down what conservation laws would be subject to the law.  Despite the claims of its proponents, this modified version would still gut the Lacey Act.

Despite claims that the bill is aimed at protecting American business and not supportive of illegal loggers, the Republicans (with the exception of one) also voted against two amendments offered by the Democrats.  The first amendment (offered by Rep. Markey) would have restricted imports from countries that engage in drug trafficking, trafficking of people,and are state sponsors of terrorism.  Illegal loggers are often closely tied to illegal drugs, slavery and child labor, and terrorism so this amendment would have ensured that imported wood doesn't support these activities. The second amendment (offered by Rep. Garamendi) would not have the RELIEF Act go into effect if the Secretary of Interior and the Governors of timber producing states certify that the RELIEF Act is "negatively impacting employment" in the U.S. timber industry. Since the Lacey Act protects American workers against illegal activity, this amendment would have ensured that the RELIEF Act didn't lead to job loss in the timber industry.

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Pressure Mounts to End Mountaintop Removal Coal Mining

Mtr weekThis week hundreds of residents from Appalachia and beyond came to Washington, DC, to demand Congress end mountaintop removal coal mining and enforce the Clean Water Act.

They talked to their representatives in Congress and the White House, rallied, and made calls to call for and end this destructive practice that has damaged or destroyed nearly 2,000 miles of streams and flattened over 500 mountains, and threatens to destroy 1.4 million acres of mountaintops and forests by 2020. The visit was organized by several Appalachian grassroots organizations, including the Alliance for Appalachia and Appalachian Voices, where I previously served as executive director.

This week, I was deeply moved as I watched live streaming videos of local residents from Appalachia get arrested for holding sit-ins at Rep. Hal Rogers' and Rep. Nick Rahall's offices. I listened to them insist that they are sick and tired of the coal industry poisoning their drinking water, destroying the beauty of Appalachia, and strangling their communities while their Congressional representatives do nothing. I saw their elected representatives close the door in their faces.

At a Wednesday rally in DC, some shaved their heads as a symbolic act to draw attention to the stripping of our mountains - the photo with this column shows some of those folks. This followed on the heels of a similar demonstration led by some brave Appalachian women on Memorial Day on the steps of the WV state capitol. This time, Sierra Club organizer Bill Price was one of those who made this dramatic statement. See photos from I Love Mountains here.

This activism came the same week that many other local residents in Kentucky stood up to the coal industry at Environmental Protection Agency hearings about mountaintop removal coal mining permits. Our Kentucky Beyond Coal organizer Alex DeSha said the coal industry bused in hundreds of employees to the Tuesday hearing in Frankfort, but all left after former Massey Energy head Don Blankenship spoke only an hour into the hearing.

Meanwhile, Alex and other activists from the Kentucky Sierra Club and Kentuckians for the Commonwealth (KFTC) stayed until the hearing ended, offering "rational arguments recognizing the EPA's authority to step in where the state has consistently failed to act in the public interest."

Alex continued, "I was the last speaker of the night out of 120 speakers, making a final call for the EPA to not listen to the fear being peddled by the coal industry and stand strong on its objections in the face of systematic state failure to enforce the Clean Water Act."

He added that pro-coal attendees heckled many Sierra Club and KFTC speakers, with some of the hecklers even having to be removed by police. I know first-hand how intimidating these kinds of settings can be, and the fact that these volunteers stood their ground is very inspiring. There's video of the heckling here.

The next EPA hearing in Kentucky is today (Thursday) in Pikeville, Kentucky, and we and our allies will be there again.

Finally, last week my friend Maria Gunnoe, a powerful Appalachian woman and community leader, found herself in hot water at a House Committee on Natural Resources hearing in Washington, DC. Gunnoe - a mother herself - wanted to show a photo of the alarming water coming out of the tapat one Appalachia family's home as a symbol of what so many Appalachian coalfield families are facing - it was a photo of the family bathing their daughter in disgusting red water. The family lives near a mountaintop removal coal site.

A GOP representative not only refused to let her show the photo, but actually had Gunnoe questioned about child pornography by the Capitol Police. Mother Jones has more on the controversy:

"I had to pull my chin off the table," Gunnoe, a mother of two, said. "It gives you a very sick feeling when you're actually a protector of children." In 2009, she won the prestigious Goldman Environmental Prize for her work defending rural West Virginia communities against the health and ecological impacts of mountaintop-removal coal mining.

Maria, who described the incident as a "new low" in her 15-year fight to end mountaintop removal, told Politico:

"I wanted Congress to see this because it's what we have to deal with," she said."It is an obscene photo, and it's not because this girl doesn't have a bathing suit on. It's obscene because our children shouldn't be sitting in bathtubs full of red water."

The coal industry and their allies will do everything they can to keep lining their pockets at the expense of our health, our communities, and our environment. They bully Appalachian residents and pay big money to members of Congress to keep public health and environmental safeguards weak. And as Maria's story shows, they are willing to stoop to new lows all the time.

I am sick and tired of this - just like all these Appalachian neighbors of mine. We must end mountaintop removal coal mining.

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Wind works — time to pass the Production Tax Credit

The wind industry supports more than 75,000 American-made jobs around the country, and is helping to lead the way toward America's clean energy future.  But right now Congress is holding the fate of thousands of those jobs in its hands.

The Production Tax Credit (PTC), a federal policy that helps level the playing field and supports these jobs, is set to expire at the end of the year. If the PTC is allowed to expire, approximately half of all existing US wind jobs are expected to be lost before the end of the year -- something we can't afford during this tough economy.

As my colleague Dave Hamilton, Director for Clean Energy of the Beyond Coal Campaign, said, "Every day of uncertainty for the industry is causing more delayed projects and more layoffs."

In response, today the Sierra Club launched "Wind Works," a new campaign to advocate for renewal of the PTC. This campaign is the Sierra Club's move to the next level in advocating for renewable energy jobs and ensuring America transitions to a clean energy economy.

"Wind Works" will ensure lawmakers know that Americans want clean energy solutions and that they won't sit back while congressional inaction causes further job losses.

Moving America toward a clean energy future will not only create new, high-quality American jobs, but will also yield significant public health benefits. Renewable energy like wind power replaces energy from fossil fuels that cause air pollution, which leads to heart attacks, asthma attacks and more than $100 billion in medical costs.

Wind energy is an important part of America's energy mix:

  • Over 400 American manufacturing plants build wind components.
  • Wind is supplying 25 percent more electricity to Americans than it was a year ago.
  • States like Iowa and South Dakota already generate 20 percent of their electricity from wind power and that number is growing quickly --  in March 2012 wind was responsible for 29 percent of the energy supply in Iowa and 32 percent in South Dakota.
  • The wind industry is on track to produce 20 percent of America's electricity by 2030.

Join us in supporting American jobs in the wind industry by telling your members of congress to renew the PTC now!

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Local Ownership Doubles Economic Value of Wind

Local ownership of a wind project accounts for half of its lifetime economic value to the community!

From: Value Creation for Local Communities through Renewable Energies [pdf]

This post originally appeared on ILSR’s Energy Self-Reliant States blog.

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Powerful New Video: Protect the Moapa Band of Paiutes from Dirty Coal

The Moapa Band of Paiutes continues to fight the pollution from the nearby Reid Gardner coal plant in Southern Nevada, and the Sierra Club stands with them. Today, we are releasing this powerful new video that features members of the tribe telling moving personal stories about the devastating effects of pollution from Reid Gardner.

I first wrote about the Moapa in late April when we supported the Moapa Band of Paiutes on their three-day, 50-mile cultural healing walk from their reservation to the Lloyd George Federal Building in Las Vegas. The walk brought visibility to the damage that the Reid Gardner coal-fired power plant is doing to the tribe's health, culture and economy.

Following that march, on May 3, the Environmental Protection Agency (EPA) held a hearing on the Moapa reservation about the pollution permits for Reid Gardner. That's when much of the footage was taken for this short, unforgettable video.

The hearing was packed with tribal members telling their stories of serious health problems:  asthma, other lung diseases, nosebleeds, severe allergies, heart disease, and more.  Members also talked about being unable to live their lives according to their culture: the toxic dust stirred by the wind keeps people indoors; they are afraid to gather herbs and use them because they know they are contaminated with coal ash; and they universally are concerned about the long-term survival of the tribe.

This is an issue of fairness and justice.  This Tribe deserves clean air and water, not an outdated coal plant saddled with second-rate pollution controls.

The Moapa are leading the way beyond dirty coal and to clean energy by developing a major solar plant on the reservation.

Now EPA needs to do its part by requiring first-rate technology to reduce air pollution at the Reid Gardner coal plant. You can help - take action today to tell EPA to protect the Moapa from dirty coal pollution.

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A Big Week for Public Health, Grassroots Activism

This has been a big week for clean air, public health, and grassroots activism that is moving America beyond coal.

First, we can breathe easier this week knowing that more aging, polluting coal plants are being retired as South Carolina Gas & Electric announced the retirement of six coal boilers.  As I've said with other coal plant retirements, now we must ensure that the transition from coal to clean energy happens in a way that protects workers and communities. We've seen it happen before – from the Pacific Northwest to the Tennessee Valley - and today we call on SCG&E to work with the employees at its affected plants.

Then yesterday we saw a victory against coal exports when the Seattle City Council voted "Unanimously (and Symbolically) Against Transport of Coal"- marking their disapproval of coal exports through their city and the region. We've seen amazing work by dedicated residents of the Pacific Northwest to get communities along the coal export rail lines to oppose or raise objections to new coal export facilities. With six new coal export terminals proposed that would ship 150 million tons of coal per year to Asia, these hard-working activists have been sounding the alarm all along the train routes - from points east, to Spokane, through the Columbia River Gorge; and from Portland, Oregon, to Bellingham, Washington. This news came just as the Energy Information Administration (EIA) released its latest numbers, showing that coal generation was down to only 34% of US electricity in March - its lowest level since 1973, the first year the agency started keeping records. Meanwhile, wind increased by 28% from this time last year nationwide - Iowa is now getting 29% of its electricity from wind, and South Dakota hit 30%!

King Coal is struggling - they know Americans are fed up with their life-threatening pollution and their excessive lobbying for loopholes in our clean air and water laws. Americans wants clean energy. These winds of change are blowing not just on our coasts, but even in the heart of Appalachian coal country. Yesterday, the New York Times ran a major front page article that featured American Electric Power's massive 800MW Big Sandy coal plant as a symbol of both coal's decline, and the increasing pressure on ratepayers to prop up aging coal plants.

Later that same day, AEP announced it was withdrawing its plans to put a $1 billion scrubber on the Big Sandy coal plant, which would have caused local rate-payers' bills to skyrocket. It was a stunning reversal.

Until yesterday, American Electric Power was planning to sink over a billion dollars into new scrubbers on the plant. However, AEP faced strong criticism from the local community over a 30% increase in rates that would be required to finance the upgrades. This rate increase would have taken the average energy bill for a household from around $1,500 per year to over $2,000 a year.

"I went to the hearing and listened to AEP explain their plan," said Patty Wallace, an 82-year-old resident of Louisa, Kentucky and member of Kentuckians For The Commonwealth. "Their own presentation showed exactly why the proposal to invest more money in that old coal plant made no sense. On top of our existing bills, all of us would have to pay a billion dollars in surcharges. I said, 'We'd be fossil fools for sure to do that.' I'm glad to see that they are beginning to pay attention to what's going on in the world. It's time to invest in energy efficiency and clean energy."

Finally, there is a new voice in that fight for clean energy this week - in Indiana, the Sierra Club's new state Beyond Coal campaign representative, Dave Menzer, was the subject of a full-page profile in the Indianapolis Business Journal (article is behind a pay-wall). While the Journal said that coal interests in the state might see Dave as "the devil," his vision would seem pretty reasonable to most Hoosiers, and most Americans:

"It really makes sense to put that money into something cleaner, in our view, than into something past the point of its useful life," Menzer said.

Indeed.

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Closing the Gap: International Global Warming Actions for 2012 (Part 3)

Mind the Gap.PNGIn Durban, South Africa countries agreed to: launch the negotiations on a new legal agreement to be adopted in 2015, move forward implementation of the agreements reached in Cancun, finalize the negotiations on the second round of the Kyoto Protocol, and address the gap between what the science demands and the current actions that countries have pledged.  This later issue – “closing the mitigation gap” – is a critical task that must begin in 2012.  Many of the actions to begin to close the gap are poised for even greater movement in 2012.  These steps could go a long way in helping address global warming and complement the domestic actions that many countries are beginning to implement.

This is a four-part post.  Part 1 focuses on the actions at that are happening at home in key countries and a couple of key issues to watch in these countries.  Part 2 considers the actions at Rio+20 that are essential for moving forward on global warming action.  Part 3—this post— discusses key actions to “close the mitigation gap” that are at critical turning points in 2012.  Part 4 outlines some key debates this year that are important to “lay the groundwork for future action”.

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Tell EPA You Support Carbon Pollution Protections

At public hearings in Chicago and Washington, D.C. today, supporters, public health officials, and scientists are testifying in favor of the Environmental Protection Agency’s Carbon Pollution Standard, the first-ever limit on life-threatening carbon pollution from power plants.

Thousands of Americans have already spoken out via email in support of these standards to protect our health and clean our air, and now hundreds more will do it in person at these hearings.

This morning I spoke at the Washington, DC, hearing. I want to share that testimony with you and encourage you to follow along with the hearings online to both voice your support and to see the support from Americans nationwide.

(Also, looks like the coal industry is still paying people to say they support coal - look at how they paid people to wear pro-coal shirts to the Chicago hearing)

Here’s what I said to the EPA this morning:

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What lies ahead for international action on global warming for the rest of 2012? (Part 1)

Stop Global WarmingWith the haze of the Durban climate negotiations finally lifting, the climate negotiations in Germany at the midway point, and one month before Rio+20 it is time to reflect on the path that lies ahead for the rest of this year.  While global negotiations have slowed since the high-intensity period over the last three years (in Copenhagen, Cancun, and Durban), that doesn’t mean we can afford for action to slow down.  After all, as the International Energy Agency just pointed out the door for avoiding the greatest impacts is quickly closing.

Four key themes are critical to watch the remainder of this year that are essential ingredients for progress on international global warming action: (1) the actions countries take at home right now; (2) the actions countries commit to implement at Rio+20; (3) how much progress is made in closing the “mitigation gap”; and (4) what stage is set this year for the international legal agreement that is to be reached in 2015.

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