Renewing the Renewable Energy Tax Credit

Last friday, the Clean Energy Stimulus Act of 2008 was introduced to the US Senate. I was encouraged to hear about this as I have been interested in a new solar facility that is being proposed in Arizona.

The Spanish firm Abengoa has recently finalized a deal with the Arizona Public Services Company to build what would be the largest concentrating solar facility in the world. Rated at 280 MW, the facility (named Solana) is planned to be built about 70 miles outside of Pheonix. But it seems that the facility could be completely scrapped if the renewable tax credit for solar is not renewed.

The Solana plant uses parabolic trough mirrors to heat a fluid that then will boil water and run a turbine. As we all know, photovoltaic's are limited by a solar-to-thermal efficiency. The concentrated solar mirrors do not suffer from the same phenomenon. Also, the hot fluid will be used to heat molten salt in a large insulated tank. So, the hot salt can be stored and used after the sun goes down to create more steam and electricity. (very cool idea)

From what I've read, it's hard for companies to invest large amounts of money into these type of renewable facilities when it's unknown whether or not the tax credit will be around in the future. With the credit, such large facilities are economically reasonable, but without the credit they are not good investments by any means. So, it particularly interested me that the proposed bill to renew the renewable energy tax credit would extend the commercial investment tax credit for solar eight years...not one or two...but eight! It about time the government made a more substantial incentive for renewable energy. Let's hope that the bill gets passed soon and more projects like Solana are developed here in the US.