Barbara Sands, renewable energy expert at PA Consulting Group, says that to address the challenge of expiring federal incentives for renewables, players across the supply chain will need to adapt remain competitive, and she highlights the ways utilities are most likely to do so.
Federal incentives have been the major driver in reducing the direct cost of renewable energy generation to customers. Between 2009 and 2011, the federal cash grant program provided almost $10 billion to renewable facilities (according to US Dept. of Treasury), reducing the direct cost to customers by approximately 30 per cent. However, the popular cash grant program expired at the end of 2011, and wind grants will expire at the end of 2012, with others to follow soon after.
Barbara explains in the article that with the elimination of federal incentives for renewable generation, more than $20 billion(Based on approximate capital costs of $2,000/KW in 2012 dollars for installed wind capacity) may be shifted from the federal level (i.e. all taxpayers) to the customers in states with RPS targets. The resulting rise in energy costs will test state, and by extension, regulator support for renewables, and participants across the sector will face a number of complex challenges.
Barbara is quoted as saying, "the U.S. renewable market is becoming increasingly challenging, and players across the supply chain will need to adapt to survive.”
To read the article online, please click here.