INVESTING

Investing in an Alternative Future Sondra Baker ENG 122 English Comp. II Tiffany Young December 19, 2011

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Investing in an Alternative Future

As the economy continues to destabilize and unemployment reaches previously unseen peaks the need for assistance by the U.S. Government to facilitate grants within the field of renewable energy resources is vitally important. As of December, 2011, the country is investing in renewable energy technologies with the aim to develop new job markets, strengthen the economy, and protect the environment and the US Department of Energy has announced loan guarantees and grants amounting to $246m for various renewable energy projects (BusinessWire). By increasing this investment in the future of alternative energy businesses the government can cause unemployment to be a virtual thing of the past. Alternative energy has become absolutely critical to the survival of the human race on this planet. Throughout the history of humanity energy has advanced our civilization and improved the quality of life. Energy production today continues to be dominated by nonrenewable sources. Petroleum, natural gas, coal and nuclear power account for about 93 percent of all energy production (Combs, para. 8). However, these fossil based fuels are running out quickly and the process by which these fuels are used continues to produce a damaging effect on our environment itself. In order to continue to survive, and create a sustainable future for the generations to come, development and maintenance of alternative energy technologies is necessary. As with many new ventures, this comes with a high price tag and many businesses find the costs too high without capital assistance. Switching from a fossil fuel based economy

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and society, to one which will eventually function completely on renewable energy sources is a huge undertaking and will only be possible if the problem is viewed with a sense of urgency. Unlike fossil fuels, which are exhaustible, renewable energy sources regenerate and can be sustained indefinitely. The government has begun to look at research and to give credence to resources currently in development. In 2009, President Obama signed the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) which makes payments of 10% to 30% in lieu of tax credits available to eligible persons who place in service specified energy property and apply for such payments. This Federal Grant Program considers these renewable technologies eligible property if used in a trade or business or held for the production of income.: Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Fuel Cells, Geothermal Heat Pumps, Municipal Solid Waste, CHP/Cogeneration, Solar Hybrid Lighting, Hydrokinetic, Tidal Energy, Wave Energy, Ocean Thermal, Fuel Cells using Renewable Fuels, and Microturbines. However, these incentives only apply to specified energy property placed in service during 2009, 2010, or 2011 or after 2011 if construction began on the property during 2009, 2010 or 2011 and any renewable energy project started after 2011 will no longer be considered for this program. The need for additional government grants, loan guarantees, and tax credits is critical. Adding jobs to the economy would enable the structure and security of our financial system to escalate rapidly. The alternative energy industry has the ability to not only supply clean, renewable energy to U.S. households, the wind industry alone has grown at a rate of 25 percent per year, making wind power the fastest growing source of electricity-generation in the world (Careers in Renewable Energy, Pg. 2). Alternative resources are making an economic impact in communities across America, such as in Iowa, where the wind power industry supports more

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than 3,000 Iowa jobs worth a combined payroll upwards of $70 million a year (McClatchy Tribune Business News). An estimated economic impact in four west Texas counties during a four-year construction phase of wind farms shows approximately 4,100 full-time jobs were created contributing to 58% of all jobs generated within a 100-mile radius of the area (Slattery, Lantz, & Johnson, pg. 7930). This is a welcome change for this hard-hit part of the nation. Since the oil bust of the early 1980s west Texas has been economically hanging on by a thread with many smaller towns closing up their doors completely. Many communities across the U.S. are experiencing job growth and economic relief by the introduction of alternative energy opportunities. By increasing the availability of jobs in the renewable resource industries this growth trend will continue bringing much needed relief to thousands of displaced workers and their families. In addition to increasing the economic impact by the creation of career opportunities in alternative energy, several incentives have been offered by the government to assist homeowners with the cost of incorporating alternative resources in their homes; however, those credits are fading rapidly. In 2010, individual homeowners were eligible for a 30 percent tax credit to make efficiency improvements to their homes, such as installing solar panels and skylights, adding insulation, or replacing windows or appliances, while those who waited until 2011 to upgrade their home will only receive a 10 percent tax credit. By lowering the incentives for homeowners to purchase and use alternative resources the supply and demand shifts drastically, therefore creating a domino effect and decreasing job opportunities within these industries. With the withdrawal of government grants and tax credits to businesses that provide research and development, and utilize the many alternative resources are experiencing many positions closing. At a time when the U.S. job market is so fragile it becomes even more critical

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that these incentives be extended. In a letter addressed to Congress dated December 7, 2011, Senator Jack Reed (D-RI), along with more than 30 of his Senate colleagues, signed: We are writing to urge your support for the extension of key expiring clean energy and efficiency tax provisions that create jobs and protect our environment. Allowing these incentives to expire would harm the U.S. economy, eliminate tens of thousands of jobs, and sideline billions of dollars of private sector capital investments. In particular, the renewable energy industry would be negatively impacted by an expiration of provisions. (Congressional Documents, 2011) The letter goes on to state: To date, the program has spurred the construction of sufficient new generation capacity to power more than one million American homes and has supported roughly 290,000 U.S. jobs. Allowing the TGP to expire would shrink financing available for renewable energy projects by 52 percent, according to a July 2011 survey by the U.S. Partnership for Renewable Energy Finance. This would kill tens of thousands of jobs across all clean energy industries and states. These Senators understand the need for extending support to the growth of the alternative resources market. The detrimental impact on the United States of flooding the current unemployment market with tens of thousands of displaced workers is an unacceptable choice. The evidence is clear that the Government should reinstate programs that supply incentives to the alternative energy industry, as well as the average homeowner, thereby increasing the employment opportunities and investing in the growth and transition of America. By investing in an alternative future America will be investing in its people.

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References AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 http://www.treasury.gov/initiatives/recovery/Documents/B%20Guidance%203-2911%20revised%20%282%29%20clean.pdf Business Wire, (2011). Research and Markets: Renewable Policy Analysis - Q3. Retrieved December 3, 2011, from ProQuest Newsstand. (Document ID: 2522938391). http://proquest.umi.com/pqdweb?did=2522938391&sid=1&Fmt=3&clientId=74379&RQ T=309&VName=PQD Combs, S., Texas State Comptroller (2008). Window on State Government Energy Report. Retrieved December 13, 2011 http://www.window.state.tx.us/specialrpt/energy/uses/ Congressional Documents and Publications, (2011) RI Senators Call for Preservation of Job-Creating Clean Energy Tax Credits: Reed and Whitehouse Advocating for Renewable Energy Development. Retrieved December 12, 2011, from Research Library. (Document ID: 2533907591).

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McClatchy - Tribune Business News, (2011). EDITORIAL: Keep wind energy tax credit. Retrieved December 5, 2011, from ProQuest Newsstand. (Document ID: 2526274551). http://proquest.umi.com/pqdweb?did=2526274551&sid=2&Fmt=3&clientId=74379&RQ T=309&VName=PQD NERL (National Energy Research Laboratory), (2001) Careers in Renewable Energy, DOE/GO-102001-1130 FS123 http://www.nrel.gov/docs/fy01osti/28369.pdf SeeNews North America, (2011). US senator calls for prolonging tax credits for biofuels. Retrieved December 10, 2011, from ABI/INFORM Dateline. (Document ID: 2532265591). Slattery, M., Lantz, E., & Johnson, B. (2011). State and local economic impacts from wind energy projects: Texas case study. Energy Policy, 39(12), 7930. Retrieved December 10, 2011, from ABI/INFORM Global. (Document ID: 2521312801).