Technology Corridor

Will state budget shortfalls threaten tax credits and subsidies?
Will state budget shortfalls threaten tax credits and subsidies?
Fortnightly Magazine - January 1 2003

Green Generation Feels the Squeeze

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Will state budget shortfalls threaten tax credits and subsidies?

The use of tax credits, subsidies and renewable portfolio standards has made states governments great patrons of new environment-friendly energy technology development. Many credit the tripling of wind installations to 7,000 MW from their level in 2000 as a sign of the success of state renewable programs. Yet, state budgets are now under pressure because of the decline in tax collections and other fees associated with a dismal economy. Thus, uncertainty about continued state support could slow down growth in the next year.

Although there are federal programs, it is state actions that are getting the job done. Many experts say that states have been far more successful and have spent far more than the federal government.

Fortnightly reviews the current progress of the newest energy technologies, such as fuel cells, solar, and microturbines, to assess which technologies are ready for prime time and which are not.

Fuel Cells: Offering Sophisticated Power Service

Fuel cells are, in principle, technologically clever, environment-friendly, small in size, and modular. Yet, they are also generally more expensive than conventional technologies per unit of delivered energy and lack extensive field testing within households and businesses.

Nonetheless, they have experienced significant growth in the last two years in part because of their stunning cleanliness, reliability, and other properties. The number of fuel cell systems built and operated has increased in the last two years from about 1,300 to 3,800. The dominant type is the proton exchange membrane, which has captured about 70 percent of the market. It is a global market yet North America accounts for about 50 percent of the systems put in place.

The greatest growth has been for portable fuel cells, which range in output from 1 watt to 1.5 kilowatts. The number of these units has grown from about 300 to 1,700 units in the last two years. More than 600 portable fuel cell units of 1.2 kW size were built in 2002. By the end of 2002 one company, UTC Fuel Cells, had delivered more than 200 of its stationary 200-kW fuel cell systems ( The large majority of these systems is in use throughout the United States. In addition, about nine MW of generating capacity from fuel cells were delivered in 2002. Fuel cells seem to be a rising trend.

Still, the possibility of a return to recession in 2003 could break the trend of the last two years as companies seek ways to cut costs.

Solar Collectors and Photovoltaics: Allowing Investors to Make Statements about Lifestyle

The industry standard for information on solar collectors and photovoltaic investment activity for 2002 is not yet available from the Energy Information Administration. But year 2001 data released in November 2002 is impressive. Shipments of photovoltaic cells and modules, which produce power directly, increased in 2001 nearly 80 percent to 36.3 peak megawatts-a break from a 10-year history of modest growth. Domestic solar thermal collectors, which can substitute for standard electric space and water heating units, increased