Tax credit for purchasers of hybrid vehicles. New York enacted a law in October, 2002, that exempts up to $3,000 from state and local taxes for hybrids, and provides a $2,000 personal income tax or corporate tax credit for the purchase of a hybrid vehicle. The Sierra Club points out that this tax credit must be properly structured to prevent automakers from offsetting efficient hybrid vehicles with less efficient ones. President Bush has proposed a $3 billion tax credit plan for purchasers of hybrid or fuel cell vehicles and $150 million to enhance development of such technologies under the Department of Energy's Freedom Car Plan.
Enact a 20% renewable portfolio standard. Implementing a 20% RPS by 2020 would cost very nearly the same as continuing with business as usual, according to an Energy Information Administration study in 2001; by 2020, electricity prices would actually be lower than in the business as usual scenario. Union of Concerned Scientists estimates that a 20% RPS by 2020 would represent 272 new plants, replacing the equivalent of 78 existing coal plants in addition.
Introduce tradable energy credits to encourage renewable development where it is cost-effective and to avoid long-distance transmission; 30% of our electrical power is lost to transmission and distribution.
Extend production tax credit for wind. This could save the construction of some 210 power plants by 2020. The price for wind electricity is now $.03-.06/kWh, competitive with natural gas. DOE estimates it could be extended to serve ten million homes.
Expand the current renewable production tax credit to include solar. 200,000 homes in the U.S. use photovoltaics now, expanding 15% annually. Its decentralized nature lowers capital infrastructure costs and reduces transmission losses. A square photovoltaic array 100 miles on a side in the Nevada desert could produce as much electricity as is used in the US annually. Incentives for photovoltaic power would move them down the experience curve, yielding price/performance gains from mass production and research and development similar to Moore's Law in semiconductors.
Provide investment tax credit for residential purchasers of solar systems. For example, federal tax credit of 15 percent of the cost of both solar electric and solar hot water systems installed on homes.
Increase RD&D in solar thermal power. estimates that concentrated solar power (CSP) can add more than 20,000 MW to the nation's electricity supply by 2020—obviating the need for some 65 300-megawatt plants.
Require electricity providers to disclose their fuel sources and emissions on electricity bills. As with nutrition labels, consumers should be allowed to make an informed decision about purchasing cleaner electricity. Utility deregulation in many states has made it feasible for "green" electricity providers to compete effectively against the more conventional utilities.
Increase research, development, and deployment funding for solar power.
Extend the production tax credit to geothermal. An inflation-adjusted 1.8 cent/kWh credit against taxes for the first ten years of project opeartion would encourage increased demand for, geothermal electricity, with a consequent increase in its supply. This could replace up to 21 power plants through 2020.
Expand funding for RD&D for geothermal. PCAST recommended a budget for RD&D of $50-60 million annually. Geothermal could provide 20,000 megawatts with enhanced technology, the equivalent of 67 power plants. The Geothermal Energy Association says the limiting factor for geothermal is insufficient R&D. The Bush energy plan would cut DOE's geothermal research budget in half.
Expand the production tax credit for biomass to include open-loop biomass. The present PTC is for "closed-loop" biomass, plant matter that is grown exclusively for the purpose of generating electricity; closed-loop biomass is so expensive to develop that this tax credit has yet to be used. The proposal is to extend the PTC to open-loop biomass, excluding municipal solid waste and unsustainable forest products. Estimates are that this could save 22 power plants; electricity from landfill methane could replace 4 plants.