There is a classic Saturday Night Live commercial where a bunch of guys wearing designer jeans are chatting away and every comment is an epically bad idea. It was meant as a spoof of that era’s television commercials, but it also works amazing as a lead-in to uncomfortable topics. So, I figured I was wearing Bad Idea Jeans when I thought of politics and renewable energy as a discussion point, but it turns out renewable energy is increasingly bipartisan (yes, I just said that).
The December 27th stimulus bill included several extensions and additions to the tax credits available for renewable energy. For example, the solar investment tax credit (ITC) was extended for two years, a positive not only for solar projects but also for things like fuel cells and microturbines. A standalone ITC was also created for offshore wind, which should help advance a renewable sub-sector that has much promise given offshore wind resources tend to be better than onshore. Similarly, the electricity production tax credit (PTC) was extended for one year, which mostly benefits wind generation though is also a positive for biomass, geothermal, landfill gas and more. For a bill that was stripped of its most controversial pieces to ensure passage, the fact these renewable incentives remained is a testament to the increasingly bipartisan nature of renewable energy policy initiatives.
A glance at the map below implies renewable energy is touching just about everyone in the United States. Not lost on our political leaders is this growth also translates to more jobs and tax revenues, and thus support for renewable energy reaches across political lines.
Source: U.S. Department of Energy
As an example, the table below ranks 2019 production by state for wind and solar. The top four wind producers in the United States make up 54% of total wind production and are considered red (Republican) states. Similarly, three of the top five solar producers that represent 53% of total solar production are considered blue (Democratic) states. This makes it easy for Politician A to say to Politician B if you scratch my back on solar, I’ll scratch yours on wind.
Source: U.S. Department of Energy
This brings us back to a core driver of the de-carbonization movement, which is the virtuous cycle of renewables adoption. Public policy sets the stage by providing incentives for technological innovation that lowers costs and encourages incremental public policy. There is little that can stop us as a society when we (Political Class + Main Street + Wall Street) work together.
RENEW Performance Tracker
*Source: Bloomberg. Please review disclosure information at the end of this post
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