WASHINGTON (Reuters) - Several Asian countries in addition to China could soon challenge the United States in the race to build a renewable energy industry if Washington doesn’t provide more incentives for its domestic business, venture capitalists and others told a Congressional hearing on Wednesday.
The United States, once the world’s leader in energy innovation, is now also “challenged and threatened” by India, South Korea, Malaysia and the Philippines, because it is not providing enough incentives to fund development of alternative energy and to increase demand, Ravi Viswanathan, a partner at New Enterprise Associates told a hearing chaired by U.S. Representative Ed Markey.
“These nations have outpaced the U.S. in recruiting, incenting and developing domestic manufacturing of solar, wind, and battery technology,” he said.
China already has more than half of the world’s market for solar panels and its companies are looking to export wind turbines.
The Senate failed to pass a climate bill this year that would put a price on carbon emissions, so it must pass laws that would create demand for alternative energy or fall further behind, experts told the panel.
Senator Jeff Bingaman introduced a bill this week that would require utilities to generate minimum amounts of alternative energy through a federal Renewable Electricity Standard, or RES, but the legislation faces an uncertain future.
Mark Fulton, Deutsche Bank’s global head of climate change investment research, said that many states in America have developed their own renewable power mandates, but “in most cases these do not have enforcement measures nor penalties to ensure that they are financed.”
Not everyone agrees that a federal RES is a good idea. James Sensenbrenner, the ranking Republican on the House Select Committee on Energy Independence and Global Warming, said mandates for alternative power could ultimately harm the industry by picking winners that might not ever become cheap, reliable sources of energy.
Fulton countered that the oil and gas industries receive far more subsidies than alternative energy and that alternative energies will fall in price as they develop.
Uncertainties in the United States, such as when it will pass a climate bill that would launch a carbon market and a political move in California to stop the state’s ambitious program on emissions, discourage investors from deploying capital deployment into alternative energy on a long term basis, Fulton said.
The United States could make progress if it passed a national RES, extend recovery act grant programs that will expire at the end of the year, and streamline the Department of Energy’s loan guarantee programs for small businesses, said Tom Carbone, the chief executive at Nordic Windpower.
Germany, Japan, and China have dedicated funds to develop domestic alternative energy technologies, but the United States has only just begun this effort, the experts said.
Reporting by Timothy Gardner; Editing by Marguerita Choy