Alternative/Renewable Energy Market To Weather "Bailout" Storm
Despite the "anxious" tone dominating the recent discussions surrounding the credit/financial crisis and the U.S. government proposals for "bailout" legislation, some groups within the power electronics industry, especially in the alternative energy sector, are focusing on the more positive implications of the recently enacted "bailout bill" – especially as it relates to analysis of the market. According to Darnell Group’s study on the "Worldwide Power Electronics For Distributed & Cogeneration," the dollar market for DCG power electronics (including inverters, variable frequency converters and static transfer switches) is projected to grow from $5.6 billion in 2008 to $7.6 billion in 2011, a compounded annual growth rate of 10.7%.
The US Fuel Cell Council (USFCC) applauded the vote in the US House of Representatives which granted an eight-year extension of the Investment Tax Credit for fuel cell technology. The tax credit extension, included in the House and Senate versions of the financial bailout bill, was signed by the President shortly after final passage.
The solar investment tax credit, and the rest of the clean energy tax incentives, passed as part of the "Economic Stabilization" bill. The 8-year extension of both the commercial solar tax credit and the residential solar tax credit (with removal of the monetary cap), passed the Senate (74-24) and the House (263-171). The renewable energy incentives also include breaks for wind, geothermal and other alternative sources. The solar industry says extension of the credits through 2016 would produce an extra 440,000 jobs and more than $230 billion in investments.
"We’re very pleased with today’s vote. Members of Congress who have supported these tax incentives deserve our deepest gratitude," declared Robert Rose, Executive Director of the US Fuel Cell Council. "With reliable, long-term incentives now in place, we are confident that our manufactures will see an increase in demand for their products. In addition to helping stimulate the creation of more green-collar jobs, these incentives will allow more businesses to purchase clean, efficient technologies that will help them lower their green-house gas emissions."
The vote came shortly after the release of a Department of Energy report that concluded that commercialization of fuel cells could generate 675,000 new jobs over the next 25 years. The study, Effects of a Transition to a Hydrogen Economy on Employment in the United States, concluded that fuel cell proliferation would create jobs in manufacturing, assembly, fuel production, repair, recycling, construction, and at auto shops and dealerships nationwide.
The Information Technology Association of America reported an $18.5 billion drop in R&D activity since the beginning of the year when the credit lapsed. The R&D credit extension would cost $19 billion over 10 years. The cost of the entire tax portion of the bill is close to $110 billion.
The "Worldwide Power Electronics For Distributed & Cogeneration," report can be found here