We all know that the renewable energy and fossil fuel industries don’t operate on a level playing field. Though definitions vary, the IMF found that in 2013 global subsidies of fossil fuels rose to “$1.9 trillion worldwide — the equivalent of 2.5 percent of the global GDP, or 8 percent of government revenues.” Estimates for renewable energy subsidies are only $88 billion globally. And, as CEO of SolarCity Lyndon Rive pointed out, these staggering numbers don’t even take into account the ingrained benefits the fossil fuel industry has in our legal system.
Rive was interviewed by DBL Investors co-founder and SolarCity Board Member Nancy Pfund at the World Energy Innovation Forum at the Tesla factory in Fremont, Calif. earlier this month. She asked him whether he thought the investment tax credit would be renewed for 2017 and how he intended to keep the pressure on to level the playing field between solar and fossil fuels.
“If I had a magic wand, I’d vote to get rid of the investment tax credit and tax the fossil fuel industry,” Rive said.According to Rive, the fossil fuel industry’s advantage doesn’t just exist in tax deduction and government handouts. Section 105.2 of the Uniform Building Code, for example, exempts oil derricks from the building permit requirement. (Yes, oil derricks!) The code does not define the size or shape of the derrick, nor does it specify whether or not it can be enclosed. This means that just about anyone in California, Texas, or the numerous other states that have incorporated this section into their building codes can erect a massive oil derrick in their backyard without getting a permit.
Not requiring a permit for “a big friggin’ monster of a machine” is just another way the fossil fuel industry has a leg up in the energy race, said Rive. He pointed out that without permit requirements, solar could get installed the same day instead of the two months it currently takes.
“It’s faster to get a permit for a fracking facility than it is for a solar system,” he said. “So those are the things that I get annoyed when people say a level playing field.”
Rive’s point is as disconcerting as it is important. Perhaps attempting to solve the problem with renewable energy tax credits won’t be enough to increase renewable energy development and democraticize the system. Perhaps governments need to take a hard look at the “subsidies” that exist outside the tax code, like in their building codes and permit approval processes. If this all seems too overwhelming, I can recommend a good place to start: section 105.2.
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