Environment Local News

Whitfield: Renewable Energy Isn’t Cheap

by Dan Conti, Kentucky Public Radio

The Kentucky Congressman who chairs a House Energy and Commerce Subcommittee says increasing federal subsidies for renewable sources of energy will not lower energy costs or help the economy. Republican Ed Whitfield says federal support for renewables has increased from $5 billion to $14 billion in the last three years…

“The reason that solar and wind are not taking off is that they are too inexpensive and too inefficient,” he said. “Now having said that, I recognize that they have a part in our economy. They have a part in producing electricity. But they can never be the base load.”

Whitfield says recent history shows additional funding has not lowered energy bills, even as subsidies were being raised.

“Renewables saw by far the largest increase in federal benefits,” he said. “Wind alone received a tenfold increase in subsidies. Solar increased by a factor of six from $179 million to $1.2 billion.”

He says renewables should continue receiving federal subsidies but he thinks it’s a mistake to increase them. He says it’ll be hard for the economy to rebound if energy costs continue to rise.

State of Affairs

What Did We Learn from the Ice Storm?

Wednesday, December 9, 2009
What Did We Learn from the Ice Storm?
Wind, rain, snow – nope we’re not talking about today’s forecast but the windstorm of September 2008 and the ice storm of January 2009. Throughout the city and state, people were without power – sometimes for days on end. Kentucky’s Public Service Commission decided it was time to take a look at our disaster preparedness and they’ve just released their report. Join us on Wednesday as we learn about their findings.

Listen to the Show

Related Links:

Local News

Red Flag Warning Issued by National Weather Service

Blustery winds this afternoon will significantly increase the fire danger risk in much of Kentucky and southern Indiana.  The National Weather Service in Louisville has issued a Red Flag Warning in those areas until six o’clock.

Forecaster Tom Reaugh says a combination of warm weather, dry vegetation and high winds prompted the warning.

“It’s just important to keep a close eye on any fire you might have going on outside, especially if that wind picks up this afternoon,” says Reaugh.  “A fire can get out of control very quickly and very easily, so we just want people to be careful.”

Storms are expected in the area tonight as a new weather system moves into the area.

Local News

KY Renewable Energy Industry Reacts to "Bail Out" Bill

Tacked on to the so-called “bail out” bill passed earlier this month are a suite of extensions of tax credits for renewable energy projects.  And members of Kentucky’s renewable energy industry are praising federal lawmakers for attaching them to the measure.  The credits are for utilities that install large-scale renewable electricity generation projects and for individual projects like home solar panel systems.  Kentucky Solar Partnership’s Andrew Macdonald says lawmakers also lifted a $2000 dollar cap on credits for installing solar arrays known as PV systems.

“A one kilowatt PV system may cost $8,000-$10,000 dollars, and I think the typical residential system is around 2 to 3 kilowatts.  So you might be looking at $10,000-$15,000 for the typical PV system. And if you can only get a $2000 tax credit, that’s not nearly as helpful as if you can get the full 30%,” says Macdonald.

Macdonald says the 30% credit for the entire cost could increase interest among individuals and small businesses in renewable systems.  But it could also increase the renewable industry’s comfort level when it comes to making investments in manufacturing and training.

Environment In-Depth News Local News

"Bail Out" Bill's Energy Tax Credits: Boon for KY Renewables?

Lawmakers tacked on several, unrelated extras to the bill.  Among those are extensions of tax incentives for renewable energy projects.  Some are for renewable energy producers – like electric utilities or wind farms.  Others are for individual projects, such as households that install solar panels.  David Brown Kinloch runs a small hydroelectric generation station near Harrodsberg, on the Kentucky River.  He says the passage of the bill means that he’ll finally be able to take advantage of those incentives.

“For years and years, hydro, which is a real big deal in Kentucky, did not qualify.  Well in the last couple years, both hydro and biomass have been put into the production tax credits,” says Kinloch. A 1920s-era generator at Kinloch's hydroelectric station.

Kinloch says that renewable energy projects can require significant investments.  And up until now, they haven’t looked as cost effective as fossil fuel generation.

“Being able to get the production tax credit is that one little boost that gets a lot of these projects over the top,” Kinloch says.

But Kinloch says lawmakers fell short when they extended those credits for hydro power by just two years.  He says it could discourage investors.
“It’s very difficult to make decisions not knowing if in two years when you actually get that plant on line whether that production tax credit is going to be there or not,” says Kinloch.

Solar power fared a little better.  Andrew Macdonald heads the Kentucky Solar Partnership. He says the solar industry would have fallen behind without the added incentives.

“Now that the tax credits have been extended, and not just for another year but for eight years, it’s going to allow the whole industry to make investments in manufacturing, in training,” says Macdonald.

Macdonald says the bill also removed a $2000 dollar cap on solar credits, which could be helpful to homeowners shelling out the $15 to $20 thousand dollars it takes to install a typical home system. What’s more, he expects utilities to start investing in large generation projects because they can get tax credits too.  And once the industry has a firmer foothold, Macdonald says those tax incentives will no longer be necessary.  University of Louisville Professor Emeritus an independent economic development consultant Dr. Peter Meyer agrees the incentives could help the renewables industry take off.

“The reason that some of these things make sense, in a macro, in an aggregate sense, is because they contribute to increasing the total demand for solar systems, wind systems, and so on,” Meyer says.

But Meyer says the development of this industry could bypass the poor. He says they’ll need renewable energy solutions more than anyone because fossil fuel energy costs are rising.

“In the Kentucky case, what we’re looking at is we’re looking at a situation in which we’re committing a lot in the way of tax incentives on the assumption that people have got the money, when in fact it is not at all clear that they do,” says Meyer.

Meyer points out that despite abundant coal resources, many Kentuckians struggle to afford energy bills.  And the cost of coal has nearly doubled in the past year.  Still, it’s unclear how energy prices would be affected if large utilities brought more renewable energy projects into the mix.