Solar Investments: Stimulating The Economy Or Reshaping It?

Posted on Fri 04/02/2010 by

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By Nick Loris

So much for shovel-ready. In February of 2009 President Obama signed the $862 billion stimulus bill into law and of that; $36.7 billion was allocated to the Department of Energy. More specifically, $16.7 billion is geared towards increasing the production of renewable energy and improving energy efficiency in buildings and appliances. In what was supposed to provide timely, targeted funding to stimulate the economy, many projects are having trouble getting off the ground. For instance, solar companies are in jeopardy of missing the deadline for federal funding:

NextEra Energy Resources thought it had a golden project. The company proposed a 2,000-acre solar farm, named Beacon, on fallow agricultural land on the edge of California’s Mojave Desert. The site has the great desert sun but is on degraded land near a freeway, an auto test track and old buildings. The site “is exactly where solar should be,” says David Myers, head of conservation group Wildlands Conservancy.

But two years later, NextEra still awaits permission to begin construction from the California Energy Commission, which grants permits on such projects after environmental reviews. Time is running short, not only for NextEra but for several dozen green-energy projects in California. Ground must be broken on them before year’s end to get federal stimulus funds worth 30% of the projects’ cost.”

We predicted this would happen before the stimulus bill even passed. While it is important to consider the environmental impacts of new project construction, California’s state regulators are making NextEra jump though several nonsensical hoops:

“At a January hearing before the California Energy Commission, NextEra unfurled a string of complaints about the process. The Beacon site had to have a plan to relocate desert tortoises, although the site “has no desert tortoises,” NextEra’s Scott Busa said. The company had to redo a plan five times to monitor ravens that prey on baby tortoises, although the solar fields would draw fewer ravens than the sheep that currently graze and sometimes die on the land, providing a “raven buffet,” Busa said. He also said state regulators gave NextEra a 382-day plan to offset any effect on Native American cultural resources on the site, when the company didn’t have 382 days before it had to break ground to get stimulus funding. Given that the site was considered almost “perfect” for solar, Busa said, ‘I wonder why we’re here two years later?’”

Instead of allowing the NextEra to finance the project without taxpayer assistance, Senator Dianne Feinstein (D-CA) is offering legislation to extend the deadline. The environmental hurdles were known well in advance of passing the stimulus bill. It’s clear this was less about an economic recovery and more an excuse to pour more subsidies into renewable energy projects. Unsurprisingly, the government is failing at both.

Contributing Author Nick Loris writes at The Heritage Foundation and he is a Research Assistant at The Heritage Foundation’s Roe Institute for Economic Policy Studies.

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