Michigan already missing the boat on green energy jobs

Satellite image of Michigan (graphic via Geology.com)

At TechKnow Forum 2008: Recharging Michigan in Ann Arbor on Thursday evening, Gov. Jennifer Granholm’s special adviser on renewable energy and the environment, Stanley “Skip” Pruss, brought up Germany. He held the country up as an example of what can happen when government embraces alternative energy.

Germany, as you may know, currently leads the world with regard to alternative energy research and production. In fact, according to Pruss, more people are now employed in the alternative energy sector in Germany than in the automotive industry.

John Denniston, partner in the venture capital firm Kleiner Perkins Caufield & Byers, offered this reason: It the feed-in tariff, which, by guaranteeing a profit to anyone who produces electricity that could be sold back into the grid, set off an incredibly alternative energy boom.

The following clip comes from a July 2007 issue of the UK’s Guardian newspaper:

…The secret of German success is the “feed-in tariff” (FIT). Anyone generating electricity from solar PV, wind or hydro gets a guaranteed payment of four times the market rate — currently about 35p pence a unit — for 20 years.

This reduces the payback time on such technologies to less than 10 years and offers a return on investment of 8-9%. The cost is spread by generating companies among all users and has added about one cent/kwh to the average bill, or an extra €1.50 (£1) a month.

The Germans introduced the FIT in 1999 and tweaked it in 2004, since which time things have gone mad. FITs have now been adopted in 19 EU countries, and 47 worldwide, but not in Britain. German renewables firms are now world beaters and the German economy has been strengthened, not weakened, by a rush into renewables…

One wonders why an approach like this couldn’t work in Michigan.

Perhaps we could kick-start a green business revolution in our struggling state.

Denniston, it should be noted, also said that as of right now the energy industry hadn’t gravitated to any one geographic area within the United States, as high-tech and life sciences had. In his opinion, it is still anyone’s game.

Imagine if we were the first state in the country.

Well, guess what?

We were… Or, at least, we could have been… In September 2007, Michigan became the first state in the nation to propose a feed-in tariff law. Unfortunately, once proposed by Rep. Kathleen Law, Michigan HB 5218 languished.

And since then, other states have overtaken us. The California Public Utilities Commission has approved legislation, and Minnesota and Illinois are building consensus behind initiatives of their own.

Did Michigan miss the boat? Is it too late? Do we even have the money necessary to pull off something like HB 5218? How expensive is it likely to be? Are tax credits to film producers a better long-term strategy? I think I’m going to have to write to Kathleen Law … more later.