Sunday, April 21, 2013

A bad rep for solar tax credit and LEED

Some news and rumors still seem to spread more by word of mouth than online. One of them for me is the issue of potential misuse of solar tax credits in the US, as opposed to feed-in tariffs done elsewhere. Solar tax credits are transferable and cost-based - the higher the cost of the system, then the greater the tax credit that can be sold to other businesses. That's an obvious disincentive to lowering solar costs, but less obviously it incentivizes leasing companies to inflate their cost estimates. When the IRS starts getting involved, that can really damage the political momentum we want to keep in place just as solar becomes increasingly competitive.

The solution is to play clean, folks, and maybe tighter IRS supervision. And maybe a feed-in tariff instead. Same word of mouth tells me the feed-in that's been tried at local levels in California is too small to get business support - we need a state or federal solution.

Similar issue for LEED, an environmental rating system for building design. Word of mouth that I hear is that it's way too easy to game the point system, especially because it's based on design standards instead of actual performance. Additional complication in California is that our state-mandated building design standards do a lot that LEED does, raising the question of what value LEED adds.

I've heard less about the Green Building Council standards, other than that they're supposed to be somewhat more lenient.

Yglesias discusses the issue here. As for his "price carbon" solution, good luck with that, at least on a national level (we're getting somewhere with California's cap-and-trade). Short of that solution, we need to have some performance standards incorporated into the rating system.


Tom Fiddaman said...

I'm not convinced that pushing second-best policies like tax credits is a good long run strategy. Much of what they accomplish is of dubious or diluted benefit, there's a lot of administrative complexity and the fundamental emissions reduction job doesn't get done. Then the poor performance of programs just gives the right wing something legitimate to whine about. It would be better if we put our efforts behind the right tool for the job.

Anonymous said...

Would making all buildings achieve LEED certification "solve" climate change? No. Although the main discourse on the environment is about energy, LEED is a more traditional "holistic" tool, with achievable points spread pretty evenly across other disciplines; only about a third of the points available pertain to energy use.

Even though achieving the lower levels (of LEED certification) is mostly a matter of paperwork, it has some benefit in that it enforces at least a minimum level of competence. Yes it's easy to get the points for water use reduction, but without LEED, architects wouldn't necessarily have known that. They wouldn't have been told that it's really easy to use 30% less water in your building, and they wouldn't have had the discipline to make sure they got 30% less.

RE: title 24. Remember that not every state shares California's enthusiasm for saving energy.


Brian said...

The history of failed attempts to regulate climate at the national level suggests to me that third-rate solutions are better than nothing.

It's all a continuum I guess - noone argues for perfection or nothing. Noone argues for a 99% ineffective solution. Figuring out when to strike a deal and when to say forget it, wait for next time, seems to be only a best guess situation.

Jade Graham said...

aim to promote the construction, management, and maintenance of solar energy systems in Panama. The tax incentives include: solar tax credit