Jan 14, 2013

Green Investing Report week ending 1/11/13 - Commercial Winds Reliance on Tax Credits

 For this edition of the Green Investing Report by Conserv-A-Store we take selections from a  recent article by Forbes about Commercial grade wind power and how it relies heavily on subsidy.

Commercial wind power's potential in N America is quite strong but as much alternative energy must fight against comparison to oil and gas for any gain it can make both at the utility and government levels. We like the green economists term "Negative Externalities." That is that all the bad stuff that comes from oil and gas such as drilling, pollution, maintaining a military presence of American lives in dangerous places, and the fact that oil and gas is non renewable does not come from most sustainable energies such as wind. But these Negative externalities are not figured into the cost of oil and gas. If they were oil and gas prices would escalate around 200% and wind and solar would immediately be the preferred way to power the USA


Here are the high points from the article:

1. A Production Tax credit was renewed in the Fiscal Cliff bill that will allow wind investment to be favored for another year.

2. The fact that the credit is extended for 1 year only makes it difficult for developers of wind farms to plan for future projects

3. "The American Wind Energy Association changed its lobbying tactics toward the end of 2012, sensing that the credit may lapse. So, it sent a letter to members of Congress saying that it would accept a gradual six-year phase-out of its tax incentives. Basically, the amount of the credit would be reduced by 10 percent a year until it would stop altogether in 2018."

4. “With the policy certainty that accompanies a stable extension, the industry believes it can achieve the greater economies of scale and technology improvements that it needs to become cost-competitive without the production tax credit,” the association’s letter says.

5. A battle between wind developers and the utilities that use the power has popped up. The utilities feel they are not included in the credits as much as they should be.

6. The ability of wind folks to use Master Limited Partnerships in structuring their entity as do oil and gas folks is being floated

7. Seems the thinking as of right now is that wind could have a rocky road after 2013 unless some type of incentive is allowed

Here's the entire article Wind Energy:Twisting and Turning and Getting Bent out of Shape

Here's another article from EneryBiz blog on the Wind tax credit

Here's an article about a Google Company investment in a Texas wind farm

Conserv-A-Store.com believes wind energy should be quite ubiquitous in certain areas of the N America that lend to it's dominance. The coastal areas from Northern California north toward and including Alaska are ideal for the steady wind required to generate consistent electricity from wind. The Plains states of America also offer good commercial wind potential

Our Green Company investment portfolio is still under repair-We hope to have something for you soon-stay tuned

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