Tuesday, April 09, 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.