Obama’s Clean Power Plan: What It Means for Solar
- States will be required to cut power plant emissions by 32% by 2030.
- Each state can determine how best to meet their goal through a combination of emissions reductions/trading, renewable energy, and policy changes.
- States will be incentivized to act quickly to promote wind and solar power and better demand-side energy efficiency.
- There is no immediate change to solar tax incentives or rebates for the general public, such as the 30% Federal Tax Credit.
- Environmentally, the Clean Power Plan alone is not enough to stop climate change.
- The EPA and energy industry disagree on the plan’s likely effects on electricity pricing.
At the beginning of August, President Obama announced the Clean Power Plan, an EPA mandate giving states until 2030 to decrease their carbon emissions from power plants by 32% of 2005 levels (~870 million short tons).
Using 2013 data, this would represent an approximately 12% decrease in the nation’s overall emissions. Power plants are responsible for roughly a third of the country’s emissions, with much of the rest coming from transportation and industry. Agreeing with the President’s statement that “the science tells us we have to do more”, analyses by New Scientist and Scientific American suggest that the Plan alone is not enough — “A cut of 80% is required to prevent dangerous global warming.”
Nonetheless, this is the first national carbon emissions standard for power plants, finalized after the EPA received more than 4.3 million comments from the public. Under the Plan, each state can determine how it wants to meet the 32% reduction goal: It can use any combination of emission reductions and trading, efficiency increases, alternative energy sources, and new policy/legislation.
There was no immediate change to solar tax incentives for non-governmental (i.e. home or business) purchasers, but state governments will be incentivized to increase their wind and solar production via the Clean Energy Incentive Program. Under the incentive program, the EPA will provide matching emissions credits for qualifying state programs that produce clean solar or wind power. There is also an incentive for states to increase the energy efficiency of their electricity end-users, especially in low-income communities.
The Plan lays out three phases towards meeting the goal, first increasing the efficiency of coal plants, then supplementing them with natural gas plants (which generally emit less), then increasing the use of renewable energy. The Plan does not prohibit fossil fuel power plants, but does limit the pollution they are allowed to emit. For more information, see the EPA’s Clean Power Plan Overview (PDF) and By the Numbers (PDF), or download the full 1,560-page Final Rule.
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