US solar subsidies consistent with coal, oil: report
By Valerie Volcovici WASHINGTON, May 1 (Reuters) - U.S. government support for solar energy is no different from its support for traditional energy sources, despite critics' complaints that the renewable energy source has gotten special incentives, a new solar-industry backed report found. Researchers at the University of Tennessee's Baker Center for Public Policy published an assessment on Tuesday of the incentives and employment impacts of deploying solar energy in the U.S. The solar industry has come under fire by critics after last September's bankruptcy of solar manufacturer Solyndra, who argued that the Obama administration has given the industry unfair financial incentives. Despite the controversy surrounding clean technology investment in the U.S., the University of Tennessee report highlighted that the government provides incentives every major energy production market, including solar. The report argued that solar energy has followed the same trajectory as other energy sources and technologies. In addition, mature energy sources such as coal and oil continue to receive subsidies in some form the government, the report pointed out. "We find that solar energy is following the same incentive-driven path as other traditional energy sources before it, consistent with the government's decision to incentivize energy production for a variety of policy purposes," the report said. Each traditional energy source has been developed with "significant government engagement," the report said, citing market control measures for oil and making pipelines available for natural gas distribution. It added that like oil, gas and coal, solar energy will need to go through a 30-year period of innovation and early adoption before it can "leap" to full market adoption, or reach at least one percent market share. Tom Kimbis, vice president of Solar Energy Industries Association, which commissioned the report, said the government's 30 percent investment tax credit for solar energy, which will continue until 2016, is the "type of stable instrument to help us get where we want to go." Kimbis said the solar industry's goal is to install 10GW of solar power every year starting in 2015, a goal that the tax incentive is likely to make possible, he said. "Solar is not different (from other energy sources) and is not an anomaly. Those long term instruments are needed in order to get any energy source up to full maturity," he told Reuters in an interview. The report also highlighted the potential of a mature solar energy market on creating jobs in the U.S. and increasing export potential. The researchers found that the solar industry can generate anywhere between 240,000 to 965,000 direct or indirect jobs by 2030. The export of solar technology could add an additional 67,700 jobs, the report estimated. But Kimbis warned the benefits of subsidizing solar are at risk of getting lost in the ongoing, highly politicized debate. "What's missing has been a fair and balanced analysis of what incentives other energy sources receive," he said. "It seems solar is being called out because the failure of one company."
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