Stimulus could free up funding for alternative energy projects
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The nation's financial crisis has hurt the renewable energy industry. It can be difficult to find someone willing to finance new projects and that's been bad news for Minnesota, the nation's fourth largest wind energy producer.
Tryg Sarsland, with Minneapolis-based National Wind, said he's hoping Obama's stimulus plan will free up more capital.
"Without it I'm sure we would definitely not have any growth in the wind industry," Sarsland said. "It would probably be a definite down year."
Sarsland said the Obama plan has two important provisions that could make funding more available and cheaper for the wind industry. The plan includes a three-year extension of a key federal production tax credit for wind energy.
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In the past, the tax credit was extended a year or two at a time, and sometimes lapsed for months in between renewals. Sarsland said the three-year extension helps stabilize the long-term financial outlook for wind power and should make investors more comfortable financing new projects. Sarsland also said the legislation will provide some federal loan guarantees for renewable energy projects.
"We're not really sure how that works and how someone would apply for that, but if we can use that it would really help us get financing and lower cost financing for our project," Sarsland said.
National Wind is planning a new wind farm in Iowa. The company hopes to break ground on the 200-megawatt project later this year.
The Obama plan also contains money for other forms of energy projects. Linda Taylor, with St. Paul-based Fresh Energy, said Minnesota's solar power industry could benefit. She said the legislation's tax breaks and other subsidies will help make it more affordable for homeowners and businesses to install solar energy panels.
"We have solar manufacturers, equipment manufacturers in Minnesota, and we have solar installers who want to get going," Taylor said. "It's a question of getting over those high, capital costs again. I think the stimulus package should be able to help us move in that direction."
Taylor said the legislation will also help Minnesota businesses become more energy efficient. She said some of the money likely will be used to help them buy energy saving motors, furnaces and air conditioners.
One of the big issues for renewable energy producers is getting their energy to consumers. The Obama plan contains money to update the transmission grid, but it does not address the biggest issue facing the industry.
"Quite frankly, getting the money isn't our problem," said Nina Plaushin, who works for Michigan-based ITC Holdings. "What we've been telling Congress is that our problem is the regulatory process and approvals that we have to go through."
ITC Holdings wants to build a massive new power grid for wind energy stretching from the Dakota's through Minnesota to Chicago and beyond. Plaushin said the federal government needs to overhaul the power line regulatory process. She said it's fine with ITC if states have the final say on what route a new line follows. But she said the federal government, not states, should decide whether a proposed line is needed.
