Jimmy Carter put solar heating panels on the White House during his first year in office to promote energy conservation. Ronald Reagan took them off and ushered in the era of market deregulation shortly after he was elected.

By the time Reagan was re-elected, the two oil crises of the previous decade — the 1973 OPEC embargo and the aftershock of the 1979 Iranian revolution — had faded into history, along with investment in the solar energy industry, as Middle Eastern oil flowed abundantly.

Reagan's removal of the panels was "a potent symbol," said Alan Nogee, spokesman for the Union of Concerned Scientists, an environmental group, but more significant were his cutbacks of federal support for renewable energy.

According to the U.S. Energy Information Administration (EIA), the decline in the number of U.S. solar energy firms — from 225 in 1984 to 59 in 1987 — was "probably due to the expiration of [federal] business energy tax credits."

"Huge Amounts of Funding"

The debate over federal energy policy and its lasting consequences for industry, environment, and economy is playing out once again in the current presidential campaign — this time against the backdrop of war in Iraq.

In 2002, President George W. Bush put solar panels back on the White House, and his energy bill included more than $9 billion in tax proposals to increase energy efficiency, conservation, renewable energy, and emissions-free energy.

"There were huge amounts of funding in there for renewable energy, for energy efficiency and conservation," said John Felmy, chief economist of the American Petroleum Institute.

But the bill, which figures that America's reliance on oil, natural gas, and other fossil fuels will only grow in the next 25 years or so, has twice failed to pass Congress.

One of the biggest sticking points was the bill's provision to drill for oil in the Arctic National Wildlife Refuge, which Democrats — including Democratic presidential nominee John Kerry — and environmental groups oppose.

The Kerry campaign promises that 20 percent of U.S. electricity will be produced from renewable sources by 2020. It wants to allocate $20 billion to a clean-fuels program and $10 billion to make older coal plants cleaner and seeks to extend and broaden the federal production tax credit for renewable energy.

Sierra Club spokesman David Hamilton said that he'd prefer quicker movement on renewable energy, but in comparison to Bush's energy policy, the Kerry plan "is a concrete step in the right direction."

But fossil fuels, which contribute to climate change, remain the foundation of both candidates' policies.

Hydrogen, for example, is touted by both campaigns as an alternative fuel, but its production is impossible without natural gas, a fossil fuel.

And in a 2003 report, the American Physical Society, a physics advocacy group, said that currently hydrogen is four times more expensive to produce than gasoline and that there is no existing material that could serve as a hydrogen fuel tank fit for modern consumer use.

Last year, Bush announced a $1.2 billion initiative to develop a hydrogen-fueled car by 2020; Kerry has his own plan to use hydrogen throughout the nation, also by 2020.

"Market-Driven Policy"

According to the EIA, fossil fuels, such as coal, oil, and natural gas, accounted for 71 percent of electric power generated in this country in 2003. Nuclear power accounted for about 20 percent, and renewables made up about 9 percent.

Of those, hydroelectric produced the most power — 7 percent — and solar and wind produced the least at 0.01 and 0.28 percent, respectively.

Despite technological advances and government incentives, EIA economist Thomas Petersik said his agency has forecast that "renewable fuels are projected to remain a low contributor to U.S. electricity supply through 2025."

According to Felmy, this proves that "there's an important niche role [renewables] can play. But relying on them for a significant component of our energy supply is pure folly, at least for the next few decades."

But these predictions only hold up under "business as usual," said Nogee.

He said that renewables actually capture more of the market when the EIA makes its projections with the "renewable portfolio standard" — described by the American Wind Energy Association as a "flexible, market-driven policy" for biomass, wind, solar, and geothermal energy.

The standard, which requires an increasing share of total electricity consumption be produced from renewable sources, has not been enacted at the federal level.

But roughly a dozen states, including New York, Massachussets, and California, have adopted similar policies that require electricity providers to derive a minimum fraction of the electricity they sell consumers from wind and solar power.

Government Incentives

Christine Real De Azua, a spokeswoman for the American Wind Energy Association, said that her industry could continue to gain marketshare if Congress were to pass a long-term version of the federal production tax credit for wind farms.

A short-term version of the tax credit, which also applies to organic biomass sources that are converted into fuel, has expired three times in the last five years.

Although the initial cost of setting up a wind farm is high — one-megawatt turbine costs $1 million to provide electricity to 300 homes each year — the cost of producing wind energy, once the farm is running, can be as little as five cents per kilowatt-hour or lower, she said.

"There really isn't any energy source out there that doesn't have a form of support or incentive, whether it's fossil fuels or nuclear power. All are vital, all have important government support," she said. "It would be disingenuous to say, 'OK, wind energy you need to stand on your own.'"

A July 2000 report from the Renewable Energy Policy Project found that from 1943 to 1999, the lion's share of energy subsidies — $145.4 billion — went to nuclear power. Solar received $4.4 billion, and wind, $1.3 billion.

"[B]ecause there have been subsidies in the past to other forms of fuel, then everyone lines up and says [it's] their turn," said Peter Van Doren, an analyst for the libertarian Cato Institute. But he said that ultimately subsidies amount to a "wealth transfer" for the owners of a particular energy resource, rather than lower costs for consumers.

Environmental groups like the Natural Resources Defense Council (NRDC) consider global warming and pollution the leading issues for any energy policy.

"[I]f Kerry is elected," said NRDC spokesman Dan Lashof, the challenge will be turning environmental principles into "an enforceable set of programs. There’s a lot of pitfalls between paper and regulation."

Regardless, said Charli Coon, a former policy analyst at the conservative Heritage Foundation, presidential policy can’t force consumers to embrace renewable energy.

"You run into the not-in-my-backyard-problems; people don't want to live near transmission lines," she said, and complain that "windmill farms are eyesores and that they take up a lot of room, which they do, and (that) they kill birds. Their answer to everything is no, no, no. What do they want us to use for energy?"


Additional writing by the editors


Related Links

Solar Industry Profile
Solar power at the White House
Hydrogen Economy Fact Sheet — The White House
Kerry's Plan for American Leadership in Energy Technology