Former Colorado Governor, Bill Ritter, coined the term “new energy economy” in 2006 when he hoped Colorado would become a center for renewable energy commerce. It has been a resounding failure. Advocates of renewable energy say government tax credits and loan guarantees are necessary for the wind and solar industries to be competitive against other power sources.
The resilience of Colorado’s vaunted “new energy economy” is being tested after a series of job cuts, financial setbacks and political firestorms. The latest loss was Phillips 66’s announcement last week that it is pulling the plug on a major alternative-fuels research-and-development center that was planned on the former StorageTek site in Louisville. That followed the recent news that Vestas Wind Systems was making its biggest round of Colorado layoffs, bringing the job-cut tally to about 500.
The Weld County district attorney’s office is investigating the failure of Colorado solar-panel manufacturer Abound Solar, and congressional Republicans are asking tough questions about Abound’s federal loan guarantees. Also in the loss column is General Electric’s recent decision to suspend development of the proposed $300 million PrimeStar Solar plant in Aurora that would have employed 355 workers.
At the least, the setbacks are a speed bump in Colorado’s effort to maintain a leadership status in renewable energy. At worst, they could significantly impair growth of the industry. The combined layoffs, plant closure and mothballed projects in Colorado represent the loss of more than 1,000 existing and projected jobs, plus millions of dollars of tax revenue and spinoff economic activity…
“Renewable-energy manufacturing is taking a beating across the country, primarily due to the fact that federal subsidies have run their course,” he said. “The 2009 stimulus has been spent, and the wind production-tax credit is set to expire in December. Without taxpayer handouts, these green industries simply cannot compete.”
At the end of the article, Blake Jones, president of one of Colorado’s largest solar installation companies, makes the same assertion that is often repreated by renewable energy advocates: “Oil and gas is subsidized; nuclear is subsidized… The playing field needs to be leveled in order to support the solar industry…”
This claim is completely false, as Brian Johnson, senior tax advisor for the API, explained :
The United States oil and natural gas industry does not receive taxpayer-subsidized payments. Given the recent publicity surrounding this issue, this statement may come as a surprise, yet it is 100 percent true.
Also true is that the industry pays more than $86 million to the government every single day and has an effective income tax rate of 41 percent…
A fundamental pillar of the U.S. income tax system is that businesses are taxed only on net income. This means that there needs to be some practical method for businesses to recover costs . There are many tax code provisions that allow companies to recover their costs, but tax deductions and cost recovery mechanisms should in no way be confused with subsidies…