Stateline Story

States Offering More Energy Incentives

If you've thought about going solar in the face of rising electricity costs, now may be the time to do it. With only a few exceptions, states are offering tax credits, sales rebates and other incentives to promote the use of alternative, or renewable energy sources.

A new generation of solar, wind and other renewable electric-generating systems has also made the idea of converting to "green power" more economically feasible for homes, businesses and public facilities.

At least 43 states now have financial programs aimed at moving consumers away from reliance on fossil fuels. The programs range from personal and corporate tax credits to rebates, loans and sales tax moratoriums. Nineteen states encourage investment by providing money for model projects. Fourteen states have laws mandating that a certain percentage of electricity be derived from renewable sources. And 34 states have regulations that require utility companies to accommodate renewable energy systems to help reduce monthly power bills.

California leads the pack with a multitude of incentives to promote renewable energy. Many have been in place since the early seventies. As a result, nearly 12 percent of the state's electricity is generated by solar, wind or other renewable sources.

No other state comes close to matching California, although Nevada, Massachusetts, New York, New Jersey and Texas are among those beginning to follow its lead. Nevada, which has the most ambitious goals, hopes to get up to 20 percent of its power from renewables by 2015. Massachusetts has adopted regulations requiring that at least 4 percent of the state's electricity come from renewable sources by 2009.

Despite the rise in programs designed to boost green power usage, it could be a long time before renewable energy sources provide a significant amount of the nation's electrical output; the national average is still less than two percent. Energy experts say that won't change unless states and the federal government spend more money to let people know that incentive programs exist.

"Promotion and marketing is often one of the key challenges of these (state) programs. Education is really key as well in changing attitudes," says Sue Gouchoe, a renewable energy policy manager at the North Carolina Solar Center.

Gouchoe says New York, for example, has a variety of rebate programs at the state and local level. Empire State residents who install solar or other renewable electric generating systems can get up to 60 percent of their costs back.

"If you're on Long Island, for example, you don't think about solar. But the reality is it has (almost as many sunny days) as California," adds Gouchoe, who maintains a database of state incentives for renewable energy through a grant from the U.S. Department of Energy.

Like New York, Massachusetts has a variety of sales and rebate programs. It has also just adopted a new electricity generation standard that may lead to the construction of a huge, off-shore wind turbine field near Cape Cod.

"Clearly, the Massachusetts regulations are sending the signal to investors that there will be a market for renewables," says Rob Sargent, a senior energy analyst for the National Association of State Public Interest Research Groups.

Sargent says what's happening in Massachusetts shows "the states are taking the lead over the federal government" in developing new ways to ensure energy security.

"There's been a confluence of events of late that's forcing state leaders to take another look at renewables and at conservation. They're beginning to realize it's got to be a serious component of energy policy," he says.

California's utility deregulation debacle was the first alarm that prompted state leaders to re-examine the issue of affordable, reliable energy. The spike last year in natural gas prices also influenced some governors - especially in the Mid-west and Northeast - to rethink their energy policies. And the terrorist attacks of September 11 heightened concerns about America's dependence on oil, coal, gas and nuclear power as its main energy sources.

"Now the emerging view is that all these sources are vulnerable ," says Sargent. "And what you're beginning to see is people are thinking more locally and acting more locally on policies."

Evidence can be seen in the recent statements of several governors. Minnesota Gov. Jesse Ventura called earlier this month for an increase in the amount of energy generated by wind farms. Vermont Gov. Howard Dean is pushing increased development of smaller, self-sufficient electric systems to power factories, ski resorts and large businesses. And Michigan Gov. John Engler raised eyebrows in January when he devoted nearly a third of his State of the State Address to renewable energy.

"Science and industry are successfully developing breakthrough technologies involving renewable sources of energy," Engler told state lawmakers. "It is no longer a question of whether, but when, we will leave behind an economy powered primarily by fossil fuels."