kpjoyce.com

Stimulation

Well, I don't know if you are as excited about the stimulus bill as I am. First, the economics geek in me loves watching government test every theory in the textbook to try and address this meltdown (to limited practical effect, I might add. But this has to be fertile ground for future study). Next up, a classic: Keynesian govt spending. As someone who's first economic professor was Paul Krugman (NYT columnist, 2008 Nobel prize winner, and unapologetic Keynesian), I'm fascinated to see the results.

I should say that I'm disappointed with the politics of the stimulus process, however. It is unrealistic, I know ... but I expected that the plan would be created in a more thoughtful way -- rooted in application of theory and analysis. Ultimately, congress had to put this together, I suppose.

Tomorrow's bill will be pretty good to my industry, renewable energy.
Solar:
The 30% tax credit for capital expenditures on solar has been changed to a 30% grant. This solves a major problem with the tax credit: companies that don't make money don't pay taxes. Most aren't making money right now, and 30% of a 750 million dollar solar project is a big tax credit. They've also made it possible to take advantage of subsidized financing and the 30% grant at the same time. Projects that start this have to start construction by 2010. With the lead time on permitting, this means that only projects in advanced stages of development really have a shot.
Wind:
The tax credits for wind were extended out again ... three years to 2012.
Wind projects that start construction this year or next can choose to use the solar 30% tax credit instead of the production tax credit. That is a much bigger credit (if they can find someone with a large enough tax bill to absorb it).
Overall:
Accelerated depreciation has been improved for renewable energy projects.
$6B DOE loan guarantee program
Money for renewable energy bond programs: $1.6B
Also significant money for smart grid upgrades and transmission studies (We do those!).

There was a time when earmarks and tax breaks for the energy industry were evil things. I don't mind them when they go where I want them.