Utility-Scale Solar Projects Become a Casualty of Republican Hostage-Taking in US

The extension of Section 1603 cash grants for large-scale solar developments in the US – tucked into the tax bill – were dealt a blow on Saturday. This could affect R&D developments.

In a rare weekend session, US Senate Democrats tried to bring up for a vote whether to reduce Bush era tax cuts, due to expire in 2010. They failed, because Republicans prevented the bill from coming to the floor, using their now familiar procedural trick, the filibuster.

Republicans abuse Senate rules to prevent votes on progressive bills. The vote failed, getting only 53% of the Senate vote, which in most democracies would be a win. But a rule essentially allows a 40% minority to say they are never quite ready to take a vote on some bill they don’t like, which means that to bring anything to a vote takes 60% agreement. Republicans now have a 46% minority in the US Senate. Anything over 40% means they can hold the US hostage to their wishes to keep bills from being voted on up or down.

Republican Senators in the US, some of whom make as much as $19 million a year, openly refused to allow any bills to come up for a vote until the Bush tax cuts for millionaires and billionaires are extended.

Democratic Senators wanted to let the tax cuts for the richest expire on schedule, saving $600 billion. Much smaller tax cuts for the middle class (families earning up to $250,000) they would extend, because with unemployment at a record 9%, many US families are struggling with unemployment. Anyone earning less than that would get a tax cut. The bill included much needed unemployment extension and other finance-related policy.

One little-noticed casualty of the latest example of this Republican extortion is the remarkable renewable energy policy contained in the Obama administration Recovery Act. One in particular, that 30% tax credits for building new large scale solar projects could be taken as cash grants by companies with no profits to take the tax credit against. This is due to expire on December 31.

To prevent it expiring, Senator Baucus (D) slipped an extension of the 30% tax credits into the tax cuts bill at the last minute with virtually no fanfare. How little? I am virtually the only US journalist to have noted it. Here is the Baucus amendment in the tax cuts bill. If the entire bill had been allowed by the Republicans to come up for a vote, Senators could vote on each of these items, and a simple majority, such as the 53% above, would likely have renewed them.

Baucus Amendment 4727: To change the termination date , by extending till December 2011, these renewable energy provisions of The Recovery Act:

1. Section 1603 of the American Recovery and Reinvestment Act – cash in lieu of tax credit for businesses not making a profit and unable to take the 30% tax credit on building utility-scale solar projects

2. Tax credits for heavy hybrid and natural gas vehicles and a 30% investment tax credit for alternative fuel refueling stations.

3. Tax breaks for ethanol, 36 cents a gallon for blenders, and 8 cents a gallon for small producers. A 54 cents per gallon tariff on ethanol imports.

4. A $1-per-gallon production tax credit for biodiesel and biomass diesel and the small agri-biodiesel producer credit of 10 cents per gallon extended through 2011.

5. A 50-cent-per-gallon tax credit for biomass and other alternative fuels.

6. Tax credits for energy-efficient appliances and homes.

8. Adding $2.5 billion in funding for Section 48C the advanced energy manufacturing 30% tax credit for companies manufacturing advanced clean energy products and materials.

9. Reinstating the Research and Development tax credit.

Unlike democratic nations in Europe and Israel, in the US, a very powerful fossil fuel industry has long been able to prevent renewable energy bills from passage, through the misuse of the filibuster by Republican proxies in the Senate, funded by the industry. So, to pass renewable energy policy here, Democrats must slip the language into unrelated bills and hope to get them past the ogre at the gate.

It is simply foolish in the US for Senators to openly espouse a renewable energy policy here, because the media is fully controlled and the airwaves are blanketed with blowhards from the Heritage Foundation, The American Enterprise Institute and Americans for Prosperity and other front groups, all put in place to shoot down any policy that would help move the US off fossil fuels.

It’s a silly way to run a supposedly first-world democracy. But that’s how it is.

As a result, US clean energy policy has to be slipped into unrelated bills, a little at a time, with the hope that it won’t catch the attention of the big money devoted to keeping the status quo. Thus, the production tax credits credited for building wind energy were attached to a must-pass vote on the Bush bank bailout of 2008.

That is why most of what passes for renewable energy policy in the US was slipped into The Recovery Act, the 2009 bill to stimulate the economy after the Great Recession, and passed during a brief three month period when the Democrats had a filibuster-proof majority before Teddy Kennedy died.

And now that The Recovery Act is set to expire, so is US renewable policy. This now crippled democracy seriously needs outside help!

Image: Christiandivine

More on clean energy politics:
Luz Rises Again, as BrightSource, in California
Jordan Politics Hampers Climate Change Event
Obama Tried to Get Saudis on Board with Copenhagen, Wikileaks Reveals
Please Truth-Bomb the US Voter!

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7 thoughts on “Utility-Scale Solar Projects Become a Casualty of Republican Hostage-Taking in US”

  1. Update: Section 1603 one year extension passed in the final tax bill. To A Thousand Clowns, upthread, the reason that Democrats cannot pass energy policy separately is that the Republicans prevent it from coming to a vote.

    We have a rule that they have misused (by using it to prevent majority rule)that allows the minority to prevent the majority from taking a vote.

    The Republicans get all the fossil energy “lobby’s” funds. The US is an odd kind of democracy that allows both corporate bribery and minority rule.

    So Democrats must wait till there is a bill that Republicans do want, so they will allow a vote, and then attach renewable energy policy to that.

  2. Don says:

    What we need is a 15 year plan to eliminate completely the use of petroleum like Sweden has. It started this 4 years ago and is doing pretty well at it. It would be nice to extend this also to coal. What I don’t want to see is a crazy plan of carbon credits to make certain politicians rich. Such a racket (setting up a carbon credit exchange and extracting a percentage of the fees) would add tons of red tape and beauracracy. If we want clean energy, we should build wind and solar farms, for example. The oil and coal companies are destroying the health of the citizenry as well as the environment itself. Depending upon foreign oil is helping to destroy the country financially ($700 billion per year for foreign oil) and is funding our enemies. America needs to be 100% energy independent and this is worth more than all of the wars we are fighting.

    1. A 15 year plan would assume that our voters are not bombarded with lies and thus able to sustain a long term vision. Sadly, not the case. However looks like we will get a 3 year plan. We already had a 2 year solar and wind subsidy in the Democratic Recovery Act.

      Looks like it will be in tomorrows vote, now the hostages are released, and the US congress is being allowed to take a vote. There is a 1 yr extension in the tax bill for this solar and wind incentive.

  3. greenbacks says:

    There are financial solutions available to the Solar industry that serve the same project financing incentives as 1603 did.

    The same 10 gigawatts of renewable energy project slated to be installed can still secure financing. While 1603 has been the soup-of-the-day, there is another way.

    The stimulus and federal managed programs are not the only answer.Additionally, there are other financial motivations to serve Renewables Industries that keep REC’s more valuable.

  4. A Thousand Clowns says:

    a) Why must these energy policy issues be tied to the Bush tax rate issue?

    b) Why did not Obama and the Democratic-controlled Senate and House not pass energy legislation over the last 2 years, and instead dwiddled away their political capital to the point of relinquishing the house to an irate electorate?

  5. Jay Kesting says:

    Although I am very much in favor of the extension of the Section 1603 grant I think beating up on a vehicle designed to protect us from the tyranny of the masses is self-serving and borders on incendiary.

  6. Kimberly Davis says:

    Baucus staff says they’re still working on getting it in. Thanks for your attention – you are one of only two journalists who caught this!

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