Solar water heaters are one of the most commercialized renewable energy technologies in the world and yet on a per capita basis, U.S. implementation ranks 28th in the world behind relatively undeveloped countries like Albania and Slovenia. China leads the world with an installed base equivalent to 52,500 megawatts of energy, more than 30 times the installed base of the U.S., and other developed countries like Germany, Japan, Switzerland, France, Austria, and Australia all rank far ahead of the U.S. in per capita solar hot water implementation.
Why does the U.S. lag so far behind the rest of world in solar hot water implementation? The answers are many and include consumer concerns about ascetics and cost, a fragmented supplier base of relatively small companies, competing technologies that make make buying decisions confusing and difficult, and the resistance of vested interests. Perhaps the biggest reason for the U.S. lag in implementation are national and state energy policies that are both incoherent and inconsistent.
[The petroleum industry] "probably has larger tax incentives relative to its size than any other industry in the country"
Donald Lubick, U.S. Department of Treasury's former Assistant Secretary for Tax Policy
As a country, we claim to believe in free market economics, but while the left hand of government may be saying “let the the solar hot water market make it on it own merits”, the right hand is handing out large subsidies to the coal, natural gas, nuclear, and oil industries. It is estimated that the American oil and gas industry receive anywhere between $15 billion and $35 billion a year in subsidies from taxpayers, and these subsidies don't include American's military policing of the Persian Gulf, which was estimated to cost $25 per barrel of oil even BEFORE we invaded Iraq.
Since president Nixon signed the Project Independence bill in 1974, followed by Carter's signing of the Energy Security Act in 1980, there have been dozens of energy bills passed with the intent of leading us toward the goal of energy independence. However, from 1974 to 2006 our oil imports have risen 191% from 1.27 billion barrels per year to 3.69 billion barrels and imports now amount to 65% of our total oil consumption. In addition, we have gone from being self sufficient in natural gas production to importing 19.5% of our needs. The 2005 Energy Bill was the latest attempt to cure our addiction to oil, but the bill was more a homage to “business as usual” and was packed with over $27 Billion dollars of subsidies to the oil, gas, coal, electrical generation, and nuclear industries. The 2005 Energy Bill signed by President Bush includes over $6 Billion in Oil & Gas subsidies and $9 billion in coal subsidies, and $12 Billion in nuclear subsidies including:
- geological and geophysical costs associated with oil exploration can be written off faster than present law, costing taxpayers over $1.266 billion from 2007 to 2015.
- owners of oil refineries can now expense 50% of the costs of equipment used to increase a refinery’s capacity by at least 5%, this will cost taxpayers $842 million from 2006 to 2011
- natural gas companies will save $1.035 billion by being able to depreciate capital expenditures at a faster rate that currently allowed by law
- some royalty payments for drilling for natural gas in the Gulf of Mexico will be waived exempts the gas industry from the Safe Drinking Water Act for a coal-bed methane gas drilling technique called “hydraulic fracturing,” a likely source of pollution in our underground aquifers
- increases the ability to exclude a broad range of oil and gas exploration and drilling activities from public involvement and impact analysis under the National Environmental Policy Act
- provides $1.612 billion in tax credits to invest in new coal power plants, $1.147 billion in tax breaks for owners of coal power plants to install pollution control equipment, and authorizes the appropriation of $4.8 billion of taxpayer money to help build a new fleet of coal power plants.
- provides a production tax credit of 1.8-cent for each kilowatt-hour of nuclear-generated electricity from new reactors during the first eight years of operation, costing $5.7 billion in revenue losses to the U.S. Treasury through 2025
In contrast the 2005 Energy Bill provides 30% tax credit for commercial and residential solar hot water or PV(photovoltaic) installations. Unfortunately, for residential applications that credit is capped at $2,000 per homeowner and expires Dec 31, 2008. Free markets do a great job of sorting out price, supply, quality, and demand variables, but they are completely deaf to concepts like energy security or the desire to transform our energy mix in the direction of renewables. If we want to catch up with Slovenia, we need to stop subsidizing old energy and start subsidizing renewables.
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Paying the Piper on Fuel..
** More a Chapter, than a comment***
Sadly, I find the facts and figures presented not only shocking, but entirely believeable. Unlike most of the general public, I listen to NPR and watch PBS...
I find it sad, but true that the piper we've been paying for with our tax dollars, has been importing rats by the barrel load. I gasped in disbelief, when Bush put his pen to the last "energy" bill, after most all funding and incentives for alternative energy producers and home owners' was slashed to single digit percentages from the bill. For four decades, we've slid along easy slope of cheap and easy fossil fuels' listening to the enchanting rythms' of the pipers flute. As our elected officials, stuffed their war chests full of contributions.
In the same time, other countries turned a deaf ear. Germany is an easy one to point out, with a national program. With standard goals to achieve by a certain date to supplant alternative energy use with of fossil fuels. There as a homeowner, the more energy you can save/produce the more the government will support your investments and actually pay you. -What's wrong with this picture? When we being the energy hog of the world, haven't sucessfully adopted this kind of approach? Now, several decades behind... Will Germany, come to rebuild us? I doubt it.
As our dollar falls in value to others' of the world. Oil is priced in US dollars, on the world market. -In general, an average value of two dollars to each Euro or Pound. Bringing a quick end to our status of "cheap" oil, gasoline and other refined products. You now get to work an hour, instead of an half hour for the same amount of fuel your European counter part, purchased. When you pause to consider the exchange rate value? When we soon hit $4.00 a gallon, that translates on the world market to half the amount of fuel, or the equivalant of paying $8.00 a gallon.. Welcome to the world, of Global economics?
Our trading partners in China, aren't playing on a level playing field. By artifically controling the value of their currency, to fuel their economic expansion. Fuel, being the key issue, with the artifically inflated value of their currency. Allowing them to buy oil products for a fraction of what we do. -The day their currency comes in line with the remainder of the world? You will hear the sounds and see the skid marks of their skidding economnys' tires, grind to a haul around the globe. As their brakes are slammed on. I dare say, it'll be a violent stop, that will have global economic reprecussions.
Second to religious/secular or nationalistic causes, the majority of the wolds' wars are faught over energy resources. Our leaders at the time of the WWII, understood this completely. If you cut the jugular vein of fuel/material supplies. Their economy falters, their government fails, and they loose. -That's being done to us, mainly by our own hand and ignorance. And, no one amoung us, seems to understand how or why??
Ask yourself, where as a nation do we stand today? All it takes is a look in your wallet, as the gas pump spins faster than you can count. Our true national inflation statistics, are being manulipulated, by sectoring out fuel costs. It doesn't take an economist to figure it out. When the full tank of fuel you bought two years ago, was 60% less than today. That same percentage amount, extends into every other segment of the ecomony and your purchasing power. Fuel, supplies food, in every aspect.
As a Chef, working with the wholesale segment of the food industry. Over the past two years, base food costs have increased 76%. And related labor costs have increased by 23%. Now you know, why it's much more expensive to go out to eat. If that restaurant is still in business? While your buying power has gone down by that much. Their expenses have gon up by the same amount. My past three employers' have all failed. I've given up on earning a living as a Chef. I now work for a pork processing plant, that ships its' products to China, and is also foreign owned..
Unlike WWII, we're not ten years late, getting into the game.. We've allowed ourselves to become thirty years behind. Catching up will be that much more costly, and that much more painful. How does $10.00 for a gallon for gas sound? At the current rate of annual inflation, the price of oil rising, in relation to the deflation of the dollar. -We'll be there, within ten years.
If like me? You have a vehicle that gets around 20 mpg, and you drive on average 15 miles each way to and from work? Your commute in current costs (based at $3.00) costs you 4.50 a day, or $22.50 a week. Projecting forward.. How does $13.50 a day, or $67.50 weekly, to report to work weekly sound, and nothing else? For most average working people.. That's one entire days' net wages.
While the costs of goods purchased, goes in the opposite direction towards your dollars earned.
Leaving three working days out of each one. The other misssing work day, goes to paying your taxes.
Being an election year, you and I all have a choice. Is the status quo to remain? So far.. I hear a lot of lip service towards; "it's the economy, stupid." -Yet, I only hear chirping crickets when it comes to energy being the basis (-other than banking issues), being causal. My vote will go to the first one, that makes a solid stand on that one plank alone, and doesn't flintch. Party doesn't matter, I'll go with the one that gets' it, if he or she's in the running? If not, we can all look forward to four years of it getting worse before, we can make it better.
I'd even get out, get politically involved and campaigne for a third party person. Who has a snowball's chance in hell of winning, and not a loose cannon. Who leads with that one major issue, and health care. -That person, get's it...
Choose wisely, your actual mileage, may varry..
Regards,
Spuds
"Signing Off.. Roger Wilco, over and out. Thanx, for listening and reading thru it all. I'd bet the French, would support us,"If" we had our own Bastille day? A bit of blood on the tiles, might go a long way, Metaphoically speaking? Google Washingtons' farewell adress.. He got it right.
isn't that the truth
It is funny when we talk about the "free market". We don't have a free market. Certain laws and tax breaks support oil, and coal as you pointed out. Further certain laws and tax breaks support sprawl... another environmentally unfriendly activity but of course we are always told "it is the free market deciding" when we all know that's just not true.