Clean-energy incentives: Here ... then gone

Call it penny-wise, pound-foolish (or Euro-foolish) … although “cutting off your nose to spite your face” might be more apt. Budget-cutting governments are putting the brakes on spending for a variety of clean-energy and sustainability measures, raising the likelihood that our bills for energy and dealing with the impacts of climate change will be even higher in the future.

Consider these recent developments:

• Spain this past week announced a “temporary” freeze on any new incentives payments for installing renewable technologies. The AEE, Spain’s wind-energy association, warned the move “involves a significant risk to the wind industry and the more than 30,000 people it employs.” The organization also noted that the country’s wind industry had zero impact on worsening the national deficit, and actually benefits the government’s bottom line by preventing the need for higher fossil fuel imports.
• Meanwhile, UK officials are vowing to appeal a recent court ruling that found the government’s abruptly announced plan to halve feed-in tariff (FIT) payments for solar panel installations “offends the legality principle.” Energy and Climate Change Secretary Chris Huhne’s response: “The reason for appealing is that we want to maximise the number of installations that are possible within the available budget for FITs, rather than use available money to pay a higher tariff to half the number of installations.” That, however, begs the question of whether a lot fewer people might be willing to install a rooftop solar system if they’re getting only half as much money for the energy those systems generate.
• On top of an already-planned 8 percent cut in feed-in tariff payments for solar power, Switzerland this week  announced plans to reduce the incentives even more — by an additional 10 percent — starting this March. Greece — no surprise, considering its fiscal state of affairs — is also lowering its FIT rates.
• In the US, which has generally lagged behind much of Europe in terms of government incentives for small-scale renewables, momentum is again building for the “drill, baby, drill” energy philosophy. Funding-strapped states like Colorado and Ohio are opening up state parks for oil and gas drilling, and Republicans in Congress are exploring every trick in the book to make sure the Keystone XL pipeline from Alberta’s tar sands gets built and oil exploration can proceed in pristine natural areas like Alaska’s Arctic National Wildlife Refuge.

Granted, many of the cuts to solar incentives can be justified by the sharp drop in photovoltaics prices over the past year or so — solar is in some ways a victim of its own success. But one of the arguments behind offering FIT payments for developing renewables has always been to minimize “uncertainty” for the clean-energy industry. Instead, it looks as if — in a situation reminiscent of the late Chicago Mayor Richard J. Daley’s mangled take on police brutality (“The police aren’t here to create disorder. The police are here to preserve disorder.”) — clean-energy incentives these days are helping to create uncertainty for the market.