For clean tech, the stakes in Tuesday’s election could hardly be higher.
No other industry outside Detroit has been as closely aligned with President Obama’s policies. Obama touted green jobs as the key to America’s economic revival and showered $90 billionÖ in stimulus funding on makers of solar panels, wind turbines, biofuels and electric cars.
His Republican opponent, Mitt Romney, doesn’t share that enthusiasm.
Romney has used the high-profile bankruptcy of Solyndra, the solar startup that collapsed after receiving $528 million in federal loans, as a cudgel against Obama. The president, he argues, has wasted precious taxpayer money on risky technologies while doing too little to increase production of oil, natural gas and coal.
Romney also wants to end a tax credit that wind farm developers consider essential to financing their projects. The credit will expire at the end of this year unless extended by Congress, and developers are already putting their projects on hold in case it disappears. The companies that make wind power equipment have laid off at least 4,000Ö American workers as a result, according to the American Wind Energy Association.
“They literally have scarcely any orders for next year,” said Peter Kelley, the association’s vice president of public affairs. “That means we could see not just layoffs but plant closures. Once you lose that manufacturing base, it’s hard to get back.”
Fiscal conservatives have questioned the wisdom of subsidizing new technologies rather than letting the free market sort them out. And Solyndra became a potent campaign weapon, tapping voters’ anger over a sluggish recovery.
“Unfortunately, this industry, which is creating jobs in America, cleaning up the environment and keeping America competitive in the world of technology, is being treated by some as a political football,” said retired Navy Vice Admiral Dennis McGinn,Ö presidentÖ of the American Council on Renewable Energy.
Should Obama win re-election, no one expects another round of stimulus spending on clean tech. The U.S. Department of Energy program that funded Solyndra issued its final loans last year.Ö
Now the fight has moved to the tax credits.
Wind farm developers rely on a production tax credit, which for 10 years gives them $22 for every megawatt-hour of electricity their turbines generate. The tax credit was first offered in 1992,Ö but it isn’t permanent. Congress has extended it seven times, each time giving it a two- or three-year expiration date.
Sometimes lawmakers legislators have let it expire, only to change their minds later. The result has been a boom-bust cycle in the wind energy business. The last time the credit was allowed to die, in 2003, wind turbine installation plunged 76 percent the following year.
“It’s hard to sign up investors for your project if the rules haven’t been set yet,” Kelley said. His organization estimates that the American wind industry could lose 37,000 jobs if the credit isn’t extended, more than half of the roughly 75,000 people employed by domestic wind developers and manufacturers.
The solar industry, meanwhile, depends on an investment tax credit. It gives developers of a solar power plant — or their financiers — a one-time credit equal to 30 percent of the project’s value. At the end of 2016, the credit drops to 10 percent.
Fiscal conservatives view both tax credits as government interference in the marketplace. Worthwhile green technologies, they say, would still find private financing without federal help.
“If private investors say no to you, and green investors like the people at Google or Al Gore say no to you, and you only have Uncle Sam to turn to, what does that tell you about your project?” said Jerry Taylor, a senior fellow at the Cato Institute libertarian think tank.
Romney favors letting the production tax credit expire this year, even though that position could cost him in states such as Iowa where wind power is growing fast.
He hasn’t addressed the investment tax credit for solar projects. But solar executives fear that a conservative Congress or White House could put it on the chopping block. Even if Obama wins re-election, the credit could be in play if the federal government takes up a larger overhaul of corporate taxes.
The solar industry doesn’t quite know what to expect from Romney, should he prevail. The same goes for many other subsets of clean tech.
Romney favors federal support for early-stage research on new technologies and has praised the government’s Advanced Research Projects Agency-Energy, which issues grants to cutting-edge startups. But his energy plan, spelled out in a white paper released in August, focuses mostly on expanding fossil fuel production and making North American “energy independent.” Renewable power is mentioned in only three pages of the 21-page paper.
“Instead of distorting the playing field, the government should be ensuring that it remains level,” the paper reads. “The same policies that will open access to land for oil, gas and coal development can also open access for the construction of wind, solar, and hydropower facilities.”
Renewable power advocates note that the fossil fuel industry receives its own tax breaks and incentives. Tyson Slocum,Ö head of the energy program at the Public Citizen watchdog group, estimates their value at roughly $6 billion per year. Oil companies have also had more than a hundred-year head start building the infrastructure to extract, process and deliver their fuel.
“There is not a level playing field for renewables versus fossil fuels,” Slocum said. “Renewables are at an absolute disadvantage.”
Even if Obama doesn’t launch any large new incentive programs, clean-tech advocates say they have a better idea of what to expect from him than from his Republican opponent. Obama’s administration has pushed to open public lands to renewable power development and make government buildings more energy efficient. Despite the political damage done to him by Solyndra, support for clean energy remains part of his campaign.
“When you look at this presidency, we’ve seen unprecedented growth in the solar industry in the last four years,” said Rhone Resch, president of the Solar Energy Industries Association, a trade group. “A lot of it was directly attributable to the policies of this administration.”
The association does not endorse candidates, and Resch noted that renewable power still gets strong support from many Republican voters in nationwide polls. Should Romney win on Tuesday, Resch hopes the new president-elect keeps that in mind.
“It’s still unclear where Mitt Romney sits on solar,” he said.