he said, "the more quickly we can deploy some of these technologies and get them to market."

At the same time, however, dependence on government bucks is cramping the alternative energy industry.

For instance, many projects depend on the federal Renewable Electricity Production Credit (REPC). However, the credit must be renewed by federal lawmakers every few years, making it hard for the industry to plan ahead.

Uncertainty over the REPC limits geothermal power development, Bird said. "There have been some geothermal projects, but probably not as many as there would be if there was a long-term extension of the production tax credit."

Even the booming wind power industry has been impacted. Wind turbine manufacturers base their production on Congress' renewal of the REPC, and fears that the credit would expire led to a turbine shortage.

But Deyette said the REPC was becoming more stable. "Congress hasn't let it expire since 2004," he noted. "It's in place until 2008, and everybody expects it to continue. Congress has strong bipartisan support for it to be renewed for at least another three years -- maybe longer."

He added that tax breaks and subsidies are nothing new in the energy industry, and that renewable energy deserved its fair share.

"Look at all of the subsidies that went to the nuclear power industry and things like that," Deyette said. "[Government] supports were there for the more conventional resources. They should be there for renewables."

However, he argued against including traditional hydroelectric power in renewable energy goals and subsidies, saying the method already is well established and may be essentially built out.  

"Many, if not all, of the large-scale opportunities for hydropower have already been developed," he explained. "With a renewable portfolio standard, the intent is to try to increase the development of emerging technologies."

Instead, a federal standard should allow existing hydropower plants to get their government-designated percentages from a process called "incremental hydro generation." That would enable a traditional hydropower plant to produce additional energy by installing more efficient generators.

Federal Standard Concerns
As the federal standard gains momentum, experts are uncertain how it would impact existing state renewable energy requirements.

Riedinger called a federal mandate unnecessary and said it shouldn't pre-empt already existing state requirements. He contended that a one-size-fits-all federal renewable energy requirement would hurt states with geographies lacking enough mature and affordable renewable energy resources. Utilities in those states would be forced to either pay fees to the federal government, or purchase renewable energy credits from electricity generators in other states with excess renewable capacity.

"In either case, this is going to increase costs for electricity providers in regions without whatever level of renewables is designated as appropriate by the government," Riedinger said. "They'll simply end up paying a fee on top of the costs already incurred in generating electricity for their own customers."

Riedinger also wonders how revenue collected through fees and penalties would be spent. "What happens to the money? Is it used to advance energy research and development? That's at least intellectually defensible. Or will it amount to just another source of revenue for the federal government?"

Deyette, on the other hand, said a federal requirement could function as a minimum standard that all states must meet. But states could implement stricter requirements if they choose.

And states buying electricity from other states with abundant renewable energy would be no different than states importing fossil fuel for electricity, he added. "A state without a lot of renewable energy also might not have a lot of fossil fuel resources, and import that fuel. You'd just be importing a different, but cleaner and more sustainable source."

The UCS projects that the United States could

Andy Opsahl  | 

Andy Opsahl is a former staff writer and features editor for Government Technology magazine.