Jeff Siegel
PTC Extension
It looks like the wind power tax credits survived the fiscal cliff deal. But I wouldn’t get too excited. The credit was extended only for an additional year. Which, as we see time and time again does not allow for any real, long-term commitment by developers or manufacturers.
Of course, I still don’t believe subsides are the best way to transition our energy economy, anyway. The truth is, decades worth of subsidies in the energy markets has never allowed for a real free market to flourish. It’s why prohibitively expensive nuclear power still exists in its current form and it’s why you don’t pay $8.00 for a gallon of 87 octane. If you did, we wouldn’t need any form of tax credit to help sell electric cars. But that’s another diatribe, for another day.
In the meantime, I am happy to know that the extension of the tax credit could end up saving as many as 37,000 jobs. I just hope they’re keeping their resumes fresh for next year.
Editor note: The PTC’s provisions were also changed so that projects under construction in 2013 can qualify. This change also applies to geothermal projects. More here.
Record German Solar Installations Despite Cuts
Despite cuts to solar subsidies in Germany, German developers added a record number of solar panels in the first 11 months of last year.
Installations resulting in more than 7,200 megawatts more than doubled that which was initially targeted by the government. This is a 62 percent gain over the previous year’s numbers. For the full year of 2012, installations are expected to top 8,000 megawatts.
Cuomo Boosts Energy Efficiency in New York
New York Governor Andrew Cuomo recently issued an Executive Order that directs state agencies to increase the energy efficiency of state buildings by 20 percent. The goal must be met by 2020.
The Governor also launched a new program that will use state building energy data to prioritize projects that can deliver the greatest energy savings per dollar. Those buildings that are the largest and most inefficient will be among the first to undergo energy efficiency upgrades, such as new lighting fixtures and controls, HVAC systems, electric motors and automated energy management systems.
Sunpower (NASD:SPWR) Soars on Buffett Deal
It was announced January 2nd that Warren Buffett’s Berkshire Hathaway bought two solar projects from SunPower Corporation (NASDAQ:SPWR) in a deal said to be worth about $2.5 billion.
This is great news for this particular domestic solar company. As CEO Tom Werner noted, the stamp of approval from a Buffett utility combined with expected cash flow from the projects will make SunPower more bankable and more credit worthy.
Of course SunPower continues to deal with very tight margins in a very competitive space. And although the Buffett deal is a feather in its cap, SunPower is still a bit risky for me. That being said, I wish nothing but success for SunPower. At the time of this writing, SPWR is up about 34%.
Hawaii Reduces Solar Subsidies
We recently learned that the state of Hawaii is about to see a 50 percent reduction in the state’s solar tax credit.
Although I don’t tend to be a fan of subsidies, in Hawaii, this is really a matter of economic security.
Bottom line: With nearly all of Hawaii’s power coming from diesel generators, this is just an accident waiting to happen. And if you destroy the beaches, you destroy the economy. It’s that simple.
Hawaii is a treasure among treasures, and lawmakers should be doing everything possible to rapidly decrease the island’s reliance on imported oil. The climate is absolutely perfect for solar, wind and geothermal, as none of this needs to be shipped in. The islands are blessed with an abundance of these resources on a daily basis.
Insurer XL Refuses to Pay For Fisker’s Sandy Losses
As a result of severe flooding during Superstorm Sandy, high-end extended range electric car manufacturer Fisker Automotive lost 340 vehicles, estimated to be worth about $33 million.
The company followed up with its insurer, but word is, that insurer, XL Insurance, has denied Fisker’s claim.
This is just one more headache in a long line of headaches for the automaker.
Fisker is now suing XL over the claim.
I’m not sure how this will all pan out, but certainly $33 million worth of damage to a startup electric car maker is nothing to sneeze at. You can read more here.
DISCLOSURE: No positions
Jeff Siegel is Editor of Energy and Capital, where his notes were first published.
