Funding the New Green Economy

We have heard lots of talk and seen lots of news on the so-called “New Green Economy”. It has become a central theme in the U.S. Presidential debate, where some candidates estimate it will bring 5 million new, high paying jobs over the next ten years. With fuel prices hurting consumers at the pumps and, with winter coming, many northern people looking at paying out close to $1,000 USD per month to heat their homes, combined with the feeling that outside influences are controlling these costs, the concept of energy independence will certainly fuel this budding industry.

But where will the needed billions in investments to start us on the road to new, clean energy come from? Here in the U.S. it has already started, and from an unlikely source. The banking crisis. Unbeknownest to most people, not all of the monies will go towards bailing out the banks and fat cats who created this mess. The same $700 billion bailout of the banks, which is officially named the Emergency Economic Stimulus Act of 2008 (EESA 2008), has officially started the green ball rolling. EESA includes billions of dollars in energy tax credits for consumers and businesses, as well as companies engaged in the development of these technologies. These include credits for solar, wind, geothermal, hydroelectric and other alternative energy producing devices. Looking towards the future, the Act also provides tax credits for purchasers of plug-in electric vehicles. Upgrading to more energy efficient appliances is not forgotten and also receives tax credits. In fact, there are 32 sections of the 442 page Act, which refer specifically to energy tax credits. There is even a section on tax credits for bicycle commuters!

Many of these credits are extensions and enhancements of federal programs which were due to expire in December 2008. And these could not come at a better time. Even with the downturn in the overall economy, surveys from bizJournals Green, still show the green industry as “the one bright spot”. However, as with any good news, there is bad. With the recent credit crunch, according to American Public Media, start up companies are finding it more difficult to get the funding they require. Those with solid funding acquired prior to the Wall Street fiasco will have a green light to take advantage of consumer and business purchases through the tax incentives.

It will still take some time before companies realize the opportunities and develop marketing strategies of their products to take advantage of EESA. And it will also take some time to reduce the overall public fear in the economy in general and move consumers back into consuming.

Joseph Winn is the President/CEO of GreenProfit Solutions, Inc. which assists businesses in becoming environmentally responsible. You may view their website at www.greenprofitsolutions.com or e-mail Joseph at jwinn@greenprofitsolutions.com .

Photo credit: Steve Wampler on Flickr