Who Killed The Solar Tax Credit ?  

The Business Spectator has a look at the bright prospects for solar thermal power in the US - assuming the fossil fuel industry doesn't manage to kill it off - Sunny prospects.

Solar energy is often labelled too expensive and too unreliable to be considered a solution to the world’s clean energy challenge. But there is a growing acceptance that that is no longer the case, which is why the US fossil fuel industry is mounting such a ferocious challenge to the proposed extension of tax credits to the solar industry by the US Congress.

A bill to extend what is known as the Investment Tax Credit for another eight years has been brought to a standstill by the Republican Party, which is under intense pressure from the fossil fuel lobby to block the bill, or at least negotiate a compromise that allows the lobby to drill in previously inaccessible areas in the US.

The debate has drawn in Barack Obama, who on Monday lambasted presidential rival John McCain and his fellow Republicans for trying to “drill their way” out of the energy crisis. Even the most famous driller of them all, the Texan oil man T Boone Pickens, agreed with Obama and called for the renewable energy tax incentives to be passed.

The level of concern from the fossil fuel industry about the emergence of solar thermal – along with other renewables – is not hard to understand. After more than a decade of hibernation caused by cheap coal and oil and a lack of government initiatives to support solar thermal, the industry is experiencing a surge of investment and its prospects look compelling.

In 2007, 100Mw of new solar thermal capacity came online across the world, the start of a rollout that is expected to add another 5,600Mw over the next four years in the US and Spain alone. If the current growth levels are maintained, by 2020, global capacity could reach 200,000Mw – equivalent to four times Australia’s current power generation capacity, or 135 coal-fired power plants.

According to David Mills, the former University of New South Wales research scientist who moved to California in 2006 to establish his company Ausra with the help of private backing, solar thermal could replace 90 percent of fossil fuel-generated electricity in the US, and most of the oil used for transport. And, he says, it could be done for less than it would cost to continue importing oil.

A separate study published in the magazine Scientific American this year suggests solar could account for more than two thirds of US electricity and more than one third of its transport energy needs.

Ausra recently signed an agreement with California’s Pacific Gas and Electricity to develop 77Mw of solar thermal power – enough to power 120,000 homes – by 2011. Within six months it expects to have contracts for 1,000Mw of solar thermal power, and negotiations are continuing for a further 5,000Mw.