Political Uncertainty in US, Biggest Impediment to Clean Energy Industry

The lack of a long-term national energy policy is putting the US at risk of falling behind in the global clean energy market both in terms of innovation and competitiveness, concludes a report by Pew Charitable Trusts.

The US is barely keeping pace with other countries, which doesn’t bode well for its long-standing reputation as a leader in innovation, say the authors.

In fact, the lack of political certainty is the single biggest impediment to growing a US clean energy industry that has the potential to reach a cumulative capacity of 126 gigawatts (GW), says Pew.

Pew estimates that revenues from the clean energy industry will rise to $1.9 trillion from 2012-2018, but at this point, the US won’t see much of it. 

They note: "Although initiatives in recent years have helped to stimulate clean energy progress in the United States, the future of government policy is now uncertain and weighs heavily on US industry and its competitive prospects."

"Industry is telling us in no uncertain terms that the US needs to adopt clear, consistent, long-term energy policies that allow American businesses to thrive, make our country more energy secure, and advance environmental imperatives," says Phyllis Cuttino, director of Pew’s Clean Energy Program. "Our research shows that there is a multi-trillion-dollar opportunity in the clean energy sector. US industry has the capacity to be a leader, provided we have the right policies in place. It’s time for Congress to support a comprehensive energy strategy by delivering long-term certainty for businesses and investors in renewable power."

Pew gives six recommendations for changing this scenario, but the sad fact is that our current Congress will not act on it: 

  • Establish a clean energy standard, which would guide deployment and investment for the long term and help the US move away from its current "episodic" strategy.
  • Significantly increase investment in energy research and development. Right now, the US ranks 8th among the G-20 nations in investment intensity and 10th in installed clean energy capacity growth since 2006.
  • Enact a multi-year but time-limited extension of tax credits for clean energy sources, which would help alleviate situations such as the wave of layoffs and project postponements precipitated by the production tax credit (PTC) deadline at the end of 2012. Even though the credit was ultimately renewed, it was just for one year, the negative ripple effect was palpable and is likely to repeat itself at the end of 2013.
  • Level the playing field across the energy sector by considering factors such as water use in energy production or changing the rules for who can sell energy, which might open the market to new players.
  • Renew and raise incentives for advanced clean energy manufacturing to boost US competitiveness. At the end of 2011, for example, US solar manufacturers ranked No. 2 after China, while wind turbine makers were No. 3 after China and Denmark.
  • Create a strategy to expand markets for clean energy goods and services abroad, which would enable the US to export microgrid technology and other renewable energy solutions to developing nations that don’t have established electric grids.

Watch Pew’s video about clean energy:


Read Pew’s report, Innovate. Manufacture. Compete: A Clean Energy Action Plan:

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