Wednesday, November 24, 2010

Subsidy and Tax Equity for Renewables

Sunset for a solar subsidy

One way to promote the clean energy industry is to have tax credits. Solar installation companies do no make much profit so tax credits are sold as "tax equity." Most costs are upfront capital rather than maintenance costs or consumables. Therefor costs depend heavily on interest rates, although I don't know exactly the mechanism for that. I suppose it is because you have to borrow to buy early, and then interest rates will change how much you have to pay back. Financing clean tech and other environmental management projects might be close to my interests.

In a conference call with reporters, another solar executive, Edward Fenster, the co-founder and chief executive of SunRun, a company that finances and installs solar equipment, pointed to another way that the current downturn has handicapped solar.

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