Wind farm development is expected to grind to a standstill if federal incentives aren’t renewed this year. (Photo by Randy and Sharon Green via Creative Commons)

Green tech business leaders say the uncertainty of federal production tax credits (PTCs) set to expire at the end of the year, along with a lack of a federal energy policy, have begun to hurt their future prospects.

Meeting with Minnesota Rep. Betty McCollum in St. Paul on Tuesday, a group of businesspeople said the lack of a clear, dependable energy policy has slowed their growth, particularly now, with the looming PTC extension deadline.

As green company representatives ticked off a list of concerns – the loss of subsidies, the declining American leadership in renewable energy, the influx of imported solar panels in U.S. markets, the lack of a coordinated energy policy – McCollum called for them to get politically involved.

McCollum said there’s no reason for an ideological split on green energy since these companies create high paying jobs and renewable industries have been growing quickly. After the next election, McCollum predicted the Minnesota delegation would work together to support the PTC and other subsidies to help solar, wind, geothermal and other renewable energy sources.

A 2009 report, The Clean Energy Economy, and looked at data from 1998-2007. The Pew Environment Group, which sponsored the discussion, said its own recent study showed clean energy jobs grew 9.1 percent last year nationally, compared with 3.7 percent for all jobs. In Minnesota, green jobs grew by 11.9 percent, compared to 1.9 percent for all jobs.

But those figures could see a steep decline if a host of government subsidies go away and if more policy planning fails to fall in place.

WindLogics, Inc. chief executive officer Mark Ahlstrom said his wind forecasting company was “seeing a huge falloff” in the number of projects this year. He’s had to trim his staff to deal with drop in business and he’s concerned wind won’t have much of a future if the PTC elapses.

“Without the production tax credits we won’t see any new projects next year,” said Ahlstrom. “We need to find a way out of this and we need a long term policy but we’re not there yet.”

Judy Poferl, president of Northern States Power, a division of Xcel Energy, Inc., highlighted Xcel’s recent announcement of a pullback in wind energy purchases. Part of it was due to having exceeded state mandates for renewable energy generation, she said, but the lack of a guiding federal policy on wind played a role in the decision, too.

Large utilities planning for the future have difficulty when the policy landscape keeps shifting, she said. Xcel has been “out in front” on buying renewable energy but “if the rules change, you could be in a bad spot,” she said.

First created in the U.S. Energy Policy Act of 1992, the PTC offers wind developers a 2.2 cent per kWh tax credit. The solar industry’s version of the PTC – called the “investment tax credit” – doesn’t expire until 2016.

Another program that just ended, the Section 1603 Treasury Grant Program, gave manufacturers a cash grant of as much as 30 percent of the cost of a project in lieu of tax credits. The attendees agreed that the program, along with others, largely pay for themselves with more jobs and tax payments to the government.

McCollum said the coal, natural gas and oil industries all have significant subsidies which rarely get highlighted in Congress or the media. The full cost of pollution from those industries in terms of higher health care costs is never accounted for, she said.

The partisan nature of the debate doesn’t make sense, said McCollum, because many conservative states, such as Texas, have huge green economies. But in Washington today green businesses “are seen as a drag on the economy,” she said, something she hopes to change.

EDITOR’S NOTE: An earlier version of this post misstated statistics from the Pew Environment Group.

Frank is an independent journalist and consultant based in St. Paul and a longtime contributor to Midwest Energy News. His articles have appeared in more than 50 publications, including Minnesota Monthly, Wired, the Los Angeles Times, the Minneapolis Star Tribune, Minnesota Technology, Finance & Commerce and others. Frank has also been a Humphrey policy fellow at the University of Minnesota, a Fulbright journalism teacher in Pakistan and Albania, and a program director of the World Press Institute at Macalester College. Frank covers the state of Minnesota.

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