Is there a green lining to the economic bailout package?

Photo courtesy of Gemma Kate Thorpe at

The $700 Billion bailout bill has stirred up mixed emotions. On one hand, relieved sighs have been heard from Wall Street, but many people are spitting mad. In the aftermath of the bill’s passage, some key sections of the Emergency Economic Stabilization Act of 2008 have been overshadowed by chaos in the stock market.

From an environmental standpoint, the biggest news is that the bail out bill renews the tax credits for alternative energy. After the bailout bill was defeated, language from the recently defeated Energy Improvement and Extension Act of 2008 was added to the second version. It provides tax credits for wind, solar, fuel cell, micro turbines, co-generation, and geothermal systems and the benefits have been extended as far as January 1, 2017. Also, tax incentives were added for “marine and hydrokinetic renewable energy” (new technologies that capture energy from waves and tidal forces).

The bill contains a few other surprises. The ceilings were raised on just about every type of tax credit. For instance, the maximum incentive for fuel cells was raised from $500 to $1,500. Wind turbines that produce less than 100 kW are now eligible for up to $4,000 of credit (that means projects up to $13,333 are eligible for a full 30% tax credit). Heat pumps qualify for up to $2,000 of credit. And solar panels now have an unlimited credit. Here’s a concise summary of the new tax benefits and other impacts.

Also of interest – the Emergency Economic Stabilization Bill allows for up to $800,000,000 of Renewable Energy Bonds, with those bonds split between public energy providers, government bodies, and private energy providers. There are also tax breaks offered for “clean” coal, coal liquefication (for use as a gasoline substitute) and coal gasification (a process that improves burn efficiency within coal turbines). One of the biggest surprises is that the bill now rewards power companies and steel producers for capturing carbon emissions. There’s a requirement that 65-70% of carbon dioxide produced from coal must be captured and sequestered to receive credit, and the projects that sequester carbon better than their competitors are given the highest funding priority.

That’s right – the benefits offered to coal producers and consumers come with strings attached. The bill even gives a tax credit for carbon sequestering! From page 175 of the 451 page bill:

(a) GENERAL RULE.—For purposes of section 38, the carbon dioxide sequestration credit for any taxable
year is an amount equal to the sum of—
(1) $20 per metric ton of qualified carbon dioxide which is—
(A) captured by the taxpayer at a qualified facility, and
(B) disposed of by the taxpayer in secure geological storage, and
(2) $10 per metric ton of qualified carbon doxide which is-
(A) captured by the taxpayer at a qualified facility, and
(B) used by the taxpayer as a tertiary injectant in a qualified enhanced oil or natural gas recovery project.

Since many oil companies are injecting CO2 into the ground already to boost production, it’s questionable whether the second half of this carbon credit will create any new benefits to the environment. There is also some concern that carbon dioxide injected into the ground can increase the acidity of groundwater and escape over time. But, if you have any great ideas about how to remove carbon dioxide from the atmosphere, now is the time to put them into practice. It may be a bit tricky to get financing though – despite the passage of the alternative energy friendly bill, many green companies are having trouble securing financing and now might not be the best time for an IPO.

Photo courtesy of Gemma Kate Thorpe’s at

Will Congress act to save Greentech jobs?

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At the end of 2008, the cost of installing and operating alternative power generators is set to rise. There are currently federal tax credits that offer a 30% rebate on solar improvements (up to $2,000), but a sunset clause will reduce the rebate from 30% to 10% after January 1st, 2009.

Also, there’s a production tax credit that offers incentives for utilities to use wind, solar, geothermal, biomass, and other alternative power sources. It’s also set to expire at the end of 2008. Unless these two tax credits are extended, industry studies warn that the US could lose more than 100,000 green collar jobs.

The open question is – how much truth lies behind these numbers? Even if the solar tax credit is allowed to lapse, there will be no effect on projects that cost more than $20,000. Is it possible that self interested alternative energy companies are trying to get legislators attention through fear? Since when did green power companies start behaving like coal lobbyists?

Geothermal Heat Pumps

coober_pedy.JPGCoober Pedy Australia is a rather hot and forbidding place to live. Temperatures in the summer hit 114 degrees and the first tree in the town history was welded together out of scrap steel. The town industry is primarily opal mining with a sideline of providing alien deserts for the movie industry; abandoned space ships litter the country side. But the opal miners figured out quite quickly that it was reasonably cool in the mines and expensive to air condition houses on the surface; so houses, churches, hotels and business often are mined right into the rock to take advantage of the stable temperature of the earth.


You see, once you get down a ways into the earth the surface temp doesn’t matter. Freezing or frying, the temp below remains a constant year round. It’s why well water tastes cold on a hot day, and miners in Coober Pedy stay cool beneath the surface, and it’s why pipes when laid below the frost line don’t freeze in North Dakota. It’s also the fundamental principle on which geothermal heat pumps work.


Heat pump technology is not new by any means; it’s how a refrigerator works. To oversimplify greatly the heat pump takes the heat from the inside of the refrigerator and transfers it to those coils on the back of the unit. Traditional home heat pumps do the same thing on a big scale. They take the heat from within your house and transfer into the air outside. When reversed it takes the heat from the outside air (I don’t care how cold it is, there is some heat) and concentrate it into the house to warm it. Heat pumps are not so efficient in very cold climates for obvious reasons.


What is relatively new is that the Geothermal Heat Pump (purists cringe at this name because geothermal properly refers to taking heat from the earth’s core) instead of trading heat with the widely varying outside air temperature exchanges heat with the more stable temperature of the earth. To accomplish this in a closed loop system pipes are placed underground, either vertically or horizontally (depending on the available space and environment) and the heat pump is attached to pump liquid through these gshouse.jpgpipes. The heat pump then distributes the (or pulls the heat out) by way of air or water circulation through the stricter. In a open loop system pipes are sunk deep into the aquifer and water is pulled from the ground, through the system then returned; using the water in the ground as the transfer partner. In some situations a closed loop system can be placed at the bottom of a pond.


So, while this system costs several times the amount of your average traditional heating and cooling system the typical payback period is under five years. Energy usage is reduced anywhere from 30 to 70 percent overall. The systems are smaller, quieter, and last considerably longer than traditional home heating and cooling options. If you want to learn more about geothermal heat pump options, visit the Geothermal Heat Pump Consortium.