Tax Breaks, Falling Costs Are Boosting Wind And Solar Congress has extended tax credits for clean energy as part of a $1.8 trillion spending bill. Solar and wind power companies say it will catapult the industry at a time when costs are already falling.
NPR logo

Tax Breaks, Falling Costs Are Boosting Wind And Solar

  • Download
  • <iframe src="https://www.npr.org/player/embed/460812946/461409361" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
Tax Breaks, Falling Costs Are Boosting Wind And Solar

Tax Breaks, Falling Costs Are Boosting Wind And Solar

  • Download
  • <iframe src="https://www.npr.org/player/embed/460812946/461409361" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

ROBERT SIEGEL, HOST:

The new year should bring more renewable energy projects to the U.S. Just before the holidays, Congress approved tax credits for clean energy. They haven't gotten a lot of attention, but solar and wind power companies liken them to Christmas presents that will catapult the industry forward. NPR's Chris Arnold reports.

CHRIS ARNOLD, BYLINE: Thanks to fracking, solar and wind power now have to compete with super-cheap natural gas. So more than ever, if you run a wind farm, you want to squeeze every bit of power and efficiency you can out of it. And you can see that at SunEdison's national control center in Boston.

UNIDENTIFIED MAN: We're done with the breaker installation.

MEGAN RODGERS: Ten tack one at Milford two. You guys have completed the breaker installation and you're ready to return to service?

UNIDENTIFIED MAN: Ten-one.

RODGERS: Ten tack one...

ARNOLD: Megan Rodgers is working at a bank of big wall-sized digital displays. She's tracking the solar arrays and wind farms that the company builds and operates in Texas, Hawaii, Maine and 20 other states. Right now she's talking to some technicians who are out in a field of wind turbines in Utah. Some of the turbines there have gone dark on her display and they might've stopped spinning.

RODGERS: Actually, there's a whole string of them that are out right now - 10-one, 10-two, 10-four, five, six and eight. And I was thinking it was due to the work that you guys started at 10-five earlier.

UNIDENTIFIED MAN: Oh, you know what? Yes, I did...

ARNOLD: Wind turbines have gotten taller in recent years, with 200-foot-long blades that help kick out more electricity. Altogether, the solar and wind farms Rodgers is watching here power the equivalent of about 1 million homes. Still, so far, wind power only makes up about 5 percent of total U.S. power generation. Solar is even less. But SunEdison general manager Matt Kearns says these tax credits that Congress just passed will help to change that.

MATT KEARNS: This is a really big deal. I mean, I think it is probably the biggest thing that's happened to the renewable energy business certainly since I've been involved - over the last decade or so.

ARNOLD: Kearns says that's because tax credits are still crucial to get financing for big solar and wind installations. And in recent years, he says Congress created too much uncertainty around the tax credits. But now Congress has extended them for five full years. That's created a lot more certainty. And already, Kearns says he's in conversations with industrial clients about new projects as a result.

KEARNS: They are eager to move. So this is a really important moment for the industry.

ARNOLD: It's an important moment in another way too. Jonathan Mir heads up power and utility research for Lazard. It's a big financial firm.

JONATHAN MIR: What we've seen that's so interesting is the very remarkable decline in the costs of utility-scale wind and utility-scale solar.

ARNOLD: Mir says if you go back to 2009, the cost of wind power in North America on an unsubsidized basis was $135 a unit. A hundred and thirty-five dollars. Compare that to today...

MIR: The best in class, unsubsidized wind can be built at prices of $30. So you've seen costs come down by 60 percent, 70 percent on utility-scale wind.

ARNOLD: Solar has fallen in price even more sharply. So Mir says, in just the past two years, we've come to a new place. He says some power utilities now want to add more, say, wind power because that power can be cheaper than even upgrading an old coal plant to meet pollution standards.

MIR: That's an amazing, amazing inflection point.

ARNOLD: Ron Binz is an energy consultant. He says the energy department finds that wind power alone could double in the U.S. in the next five years. And it reached 20 percent of total U.S. power generation in 15 years.

RON BINZ: Renewables have reached a point where there's no going backwards. They are becoming cheaper and cheaper and will eventually become the cheapest resource that we can use.

ARNOLD: But Binz says there's still the problem with renewables that they're intermittent - the sun goes down and the wind stops blowing - so one big area of research going forward is energy storage to help get around that problem. Chris Arnold, NPR News, Boston.

Copyright © 2015 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.