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Green Energy Scores Big In Obama's Stimulus Plan
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Green Energy Scores Big In Obama's Stimulus Plan

Environment

Green Energy Scores Big In Obama's Stimulus Plan
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RENEE MONTAGNE, host:

In announcing his plans for greener energy, President Obama predicted the effects would be far-reaching.

President BARACK OBAMA: It will put 460,000 Americans to work with clean energy investments, and double the capacity to generate alternative energy over the next three years. It will lay down 3,000 miles of transmission lines to deliver this energy to every corner of our country. It will save taxpayers $2 billion a year by making 75 percent of federal buildings more efficient. And it will save working families hundreds of dollars on their energy bills by weatherizing 2 million homes.

MONTAGNE: And as NPR's Christopher Joyce reports, these incentives are welcome in an industry that's been struggling.

CHRISTOPHER JOYCE: Green-energy advocates have been anticipating the opening of a green spigot. And the new energy plan delivers it: tens of billions of dollars for solar and wind energy, power plants that run on farm waste, and transmission lines to wheel green electrons around the country.

But Malcolm Woolf, head of Maryland's energy administration, says it's the simpler stuff in the new plan that will create jobs and juice up the economy now, like weatherizing homes.

Mr. MALCOLM WOOLF (Chief Energy Administrator, Maryland): The initial investment, by having folks get trained to put in insulation - that pays dividends today because it employs people. And it pays dividends down the road because those homes, therefore, use less energy and are saving those families money.

JOYCE: Woolf says most states are already set up to help consumers weatherize their homes. He says in Maryland, there are more people who want financial help to do this than he can pay for. The federal energy plan would boost his budget by at least a factor of 10. Making buildings more energy efficient is fairly quick and fairly easy. Woolf just weatherized his own home. It took a week and employed four people. The energy plan would theoretically multiply that by 2 million.

But lack of cash is only part of what's been dogging the green energy business. The recession has hurt in unintended ways. For example, the government already gives sizable tax credits to solar developers. But Arno Harris, CEO of the solar company Recurrent Energy, said that's not helping a lot nowadays.

Mr. ARNO HARRIS (CEO, Recurrent Energy): The challenge is that most developers don't have large tax bills and thus, they can't use the tax credits themselves. As a result, in order to finance the projects, they have to go find a bank or other partner with a large tax bill, and basically put together a financing partnership.

JOYCE: That worked OK until the recession hit. Now, a lot of banks aren't as interested in a solar energy tax write-off as they used to be.

Mr. HARRIS: If you're a big bank and you just lost many billions of dollars and you're not looking at a big tax bill at the end of the year, it doesn't make sense to invest in tax credits.

JOYCE: Harris says language in the new energy plan proposes to shift money straight to energy developers. Another problem in the past - one type of energy tax credit expired every year and had to be renewed by Congress. Investors couldn't plan ahead. Chris Fox is an analyst with Ceres, a green investment network.

Mr. CHRIS FOX (Director of Investor Programs, Ceres): That creates a boom-and-bust kind of environment which, as you can imagine, it makes it difficult to scale these projects up when there's a start and stop.

JOYCE: Congress is considering language in its bill that would keep this tax- credit provision but extend it for up to three years, which Fox says will encourage more private investment. Energy experts say spending cash now to weatherize homes and changing tax rules should work fast to stimulate the economy. But other provisions, such as building 3,000 miles of transmission lines to distribute solar and wind power, will take years to get going. And in the meantime, electricity from carbon-based fossil fuels, the ones that warm the planet's atmosphere, is still comparatively cheap. The energy plan doesn't deal directly with that. Chris Fox from the Ceres Investment Group says green investors would like to see that change, too.

Mr. FOX: Investors would like to see movement toward a carbon price, a mandatory national policy to reduce greenhouse gas emissions economy-wide.

JOYCE: Congress is expected to debate a price on carbon later this year. Christopher Joyce, NPR News.

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