Government Incentives to Promote Renewable Energy in the United States

Wang Mingyuan∗ In planning its own environmental policies, China has much to learn from the experiences, both positive and negative, of other countries such as the United States that have had a longer history in trying to enact environmental measures. This is particularly true with governmental incentives designed to encourage the development and deployment of renewable energy resources. The following comment, an overview of United States efforts to promote renewable energy, is presented in the hopes that it can serve to promote discussions of renewable energy in China. I. INTRODUCTION In order to implement a renewable energy system, the United States government must reform its energy regimes. The primary source of greenhouse gases, which are contributing to climate change, is the nation’s electrical energy systems using fossil fuels.1 The economic costs of internalizing what are now energy externalities will require a basic reordering of the global economy and each nation’s economy.2 If the United States is to rely less on fossil fuels and turn to renewable sources, environmental laws and government incentives are needed to effectuate this transition.

Wang Mingyuan is currently an Associate Professor of Law at Tsinghua University School of Law, China. He is also a Legal Consultant to the Legal Affairs Division of the Beijing Bureau of Environmental Protection, a Project Consultant to the American Bar Association-Asia Law Initiative, and the Executive Director of the Center for Environmental, Natural Resources & Energy Law at Tsinghua University. Thank you, John L. Hemmer, for editing this Comment. 1 ENERGY LAW AND SUSTAINABLE DEVELOPMENT, IUCN Environmental Policy and Law Paper No. 47 (Adrian J. Bradbrook & Richard L. Ottinger, eds., The World Conservation Union 2003), available at http://www.iucn.org/themes/law/pdfdocuments/Energy-Law/ENERGY-PUB-prelims.pdf. 2 Id.

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The Environmental Impacts of Renewable Energy Solar energy is continuously supplied to the earth by the sun.S. from on-going natural processes. hydropower has been excluded. and solar buildings. the construction of hydropower plants can alter sizable portions of land when dams are constructed and lakes are created. especially large-scale hydropower projects. geothermal. hydropower.356 TEMPLE JOURNAL OF SCI. http://www.S. wind energy.S. I will focus on government’s promotion of renewable energy in relevant federal legislation. ecosystems. 5 U.5 Some scholars argue that renewable energy sources include a considerable number of proven and emerging technologies. renewable energy law is to begin my research on energy’s legal problems in upcoming years. Environmental Protection Agency (EPA).7 One of my primary purposes in exploring the new field of U. geothermal energy. renewable energy refers to energy from existing flows of energy. Energy Efficient and Renewable Energy. 6 42 U. Environmental Protection Agency.htm#R (last visited Sept.3 Among others. renewable energy consists of seven specific forms: bio-mass. The legal definition for renewable energy involves any energy derived from the sun. according to the Energy Information Portal of the United States Department of Energy website. In addition. however. flooding land that may have once served as wildlife habitat. biological processes. its use can cause adverse environmental impacts involving the flow of rivers.S.eere.S. and scenic retreats. the indirect uses of solar sources include biomass energy that relies on the 3 U.gov/cleanenergy/glossary. 12. soil erosion along the riverbed upstream and downstream. Department of Energy. and Demonstration Act of 1974.S. hydropower. and otherwise harm the people who depend on those waters. farmland. and wind energy. hydropower. wildlife.S.html (last visited Sept. 12. & ENVTL.4 According to the Clean Energy website of the U. and geothermal heat flows. B. TECH. XXIV A. Environmental Protection Agency.gov/index. solar. ocean thermal energy.S. solar and wind energy are the most widely used and known sources of renewable energy. renewable energy refers to energy sources that are continuously replenished by the natural world. geothermal. According to the Solar Energy Research. 4 U.C. Development. solar energy includes both direct and indirect solar sources. solar thermal systems. Hydropower is also a very important form of renewable energy because it uses the earth’s water cycle to generate electricity. What is “renewable energy?” Generally. such as solar energy. energy sources such as wind and solar power. . and various forms of biomass are considered renewable sources because they are continuously replenished on the Earth.C. especially large-scale dams. hydrogen. § 5551(3)(1) (2005). and this energy can be converted to electricity.” For example. ocean. 7 Hydropower has been excluded from the working definition of renewable energy in this article.6 For this article. Clean Energy Glossary. while other scholars discuss renewable energy without providing a specific definition. 2005). 2005). 8 42 U.epa. and biomass energy. is much more controversial than the four forms of renewable energy discussed above. such as sunshine. There is no single. Thus. due to the construction and operation of dams.S.energy. supra note 3. http://www. For that reason.8 The direct uses of the sun’s rays are primarily in the forms of photovoltaic cells. LAW [Vol. § 5552(1) (2005). The most widely-used methods of converting solar energy into electricity are photovoltaic and solar-thermal technologies. universally-accepted definition of “renewable energy. wind.

though. dry rocks for energy. however. . and ocean thermal energy derived from differential solar heating of land and water surfaces. and contain much lower levels of hazardous elements. for those geothermal plants that rely on hot. 357 sun’s role in the process of photosynthesis. § 5552(1) (2005). 1] Government Incentives to Promote Renewable Energy in the U. In this process. Similarly. not returned to the ground. wind energy. This prevents underground minerals or pollutants from being introduced into surface waters.S. and serve recreational purposes. water from local resources is needed to extract the energy from the dry rocks. have less water discharge. Biomass grown for fuel purposes requires large areas of land and. fuel crops can be managed so that they stabilize the soil. therefore. except that large wind farms pose aesthetic concerns and wind turbines that are improperly installed or landscaped may introduce soil erosion problems. while the market mechanism 9 42 U. over time.C. much like fossil fuel power plants. Free Market and Market Failure Regarding Renewable Energy Compared to conventional energy resources such as coal and oil. These photovoltaic systems can negatively affect wildlife habitats if additional land is cleared for this technology. Generating electricity from biomass can also affect land resources. Why should government promote renewable energy? 1. For geothermal power plants. reduce erosion. provide wildlife habitats. In addition.S. Generally.9 The environmental impacts of solar energy are very small except that solar energy installations prevent the land they occupy from being used for other purposes.No. Geothermal power plants typically require less land area than fossil fuel power plants. If these biomass plants burn a waste source such as construction wood waste or agricultural waste. benefit both the economy and the environment. the environmental impacts of wind energy are very few. such as coal and oil. can deplete the soil of nutrients.S. Unfortunately. require large areas of land for equipment and fuel storage. Wind farms can also have a negative impact on birds’ migration patterns. groundwater may be contaminated when drilling wells and extracting hot water or steam. Biomass power plants. renewable energy resources are generally more environmentally-friendly and. depending on the number of wind turbines on the farm. C. produce smaller amounts of solid waste in the form of ash. require less water for the boiler and cooling system. geothermal power plants often re-inject used water back into the ground through separate wells instead of discharging the used water into surface sources. they can provide a benefit by freeing areas of land that might otherwise have been used for landfills or waste piles. and noise impacts. therefore. Also. the environmental impacts of biomass energy are few compared to those of traditional fossil fuels. it may cause the sinking of the land’s surface. because biomass power plants produce relatively limited emissions such as nitrogen oxides. However. this type of contamination can be prevented with proper management techniques. if water is not re-injected into the ground after use to maintain pressure underground. only a small amount of water used in the process of creating electricity may evaporate and.

especially electricity derived from coalburning power plants. LAW [Vol. The essence of this form of development is a stable relationship between human activities and the natural world. Furthermore. The New Idea and Requirements of Sustainable Development According to the World Commission on Environment and Development. OUR COMMON FUTURE (Oxford University Press. 11 Principle 1. In view of the different contributions to global environmental degradation. cannot be measured by price signals and. sustainable development has been widely accepted as the right model for our generation. sometimes the market fails to operate in terms of a specific energy market. In other words. Environmental benefits resulting from the development and use of renewable energy sources. Scholars have also realized that states and governments should take special responsibility for the achievement of sustainable development. . States shall cooperate in a spirit of global partnership to conserve. the costs of developing and using renewable energy are usually more expensive and less competitive than costs of fossil fuel energy. 12 Principle 3. a form of positive externality or market failure. including members of both the developed world and the developing world. 2. TECH. They are entitled to a healthy and productive life in harmony with nature11. For example. & ENVTL. which does not diminish the prospects of future generations enjoying a quality of life at least as good as our own. which is fair and good for both present and future generations. the Rio Declaration on Environment and Development stresses that Human beings are at the center of concerns for sustainable development. From the perspective of the comprehensive development of the integrated economy-society-environment system. the market fails to operate in the context of energy and renewably energy. 1987). XXIV generally may not prove renewable energy economically beneficial.358 TEMPLE JOURNAL OF SCI. States have common but differentiated responsibilities. sustainable development is “development that meets the needs of the present without compromising the ability of future generations to meet their own needs. The developed countries acknowledge the responsibility that they bear in the international 10 WORLD COMMISSION ON ENVIRONMENT AND DEVELOPMENT. The right to development must be fulfilled so as to equitably meet developmental and environmental needs of present and future generations12. because of the differences of project scale and the maturity of technology.”10 It implies economic growth and social progress together with the protection of natural environment. therefore. cannot be incorporated into the market system. Since the 1992 Earth Summit. each reinforcing the other. decisionmakers today should have to take into account the moral and legal obligations necessary to achieve both intra-generational equality and inter-generational equality. protect and restore the health and integrity of the Earth’s ecosystem. That is. sustainable development requires economic growth and social development based on balanced ecological systems.

policies and processes are crucial in achieving this. 17 Sec. which have altered the chemical composition of the atmosphere through the buildup of greenhouse gases—primarily carbon dioxide.3. Principle 11. bear the cost of pollution. . taking into account the approach that the polluter should. management objectives and priorities should reflect the environmental and development context to which they apply. The development and use of renewable energy is a desirable model for the achievement of sustainable development because. Furthermore. most of the warming is attributable to human activities. plans. Actions have been taken at the international and local levels. pursuit to sustainable development in view of the pressures their societies place on the global environment and of the technologies and financial resources they command13. it is much more beneficial for energy security. Global Warming and International Regimes on Greenhouse Gases It is generally accepted that the Earth’s surface temperature has risen in the past century. to reduce. the United Nations system plays a key role. avoid. methane. with accelerated warming during the past two decades. International cooperation should support and supplement national efforts. National authorities should endeavor to promote the internalization of environmental costs and the use of economic instruments. on the whole.16 359 “Agenda 21”17 addresses the pressing problems of today and also aims at preparing the world for the challenges of the next century. Standards applied by some countries may be inappropriate and of unwarranted economic and social cost to other countries.No. in particular developing countries14. public health and environmental safety. and other developed countries. 1. States and people shall cooperate in good faith and in a spirit of partnership in the fulfillment of the principles embodied in this Declaration and in the further development of international law in the field of sustainable development. 16 Principle 27. 13 14 Principle 7. the responsibility of governments.S. Other international. national strategies. Its successful implementation is. regional and subregional organizations should also be called upon to contribute to this effort. first and foremost. with due regard to the public interest and without distorting international trade and investment15. in principle. 15 Principle 16. 3. States shall enact effective environmental legislation. 1] Government Incentives to Promote Renewable Energy in the U. and nitrous oxide. which are common challenges facing all societies and states in the modern world. Environmental standards.S. In this context. and better understand the risks associated with greenhouse gases and global warming. The broadest public participation and the active involvement of non-governmental organizations and other groups should also be encouraged. especially the U.

Some examples of clean energy law are as follows: Solar Energy Research and Development Act of 1974. government was forced to take strong counter-measures to strengthen regulation in the energy sector and control environmental activities.S. with the aim of increasing market competition. government oversight has played a central role in the energy sector.S. in particular air pollution issues such as greenhouse gases and acid rain. In 1970. government has not taken an active role in the affairs of energy and the environment.. Geothermal Energy Act of 1980. not only were more energy laws and regulations passed to provide affordable energy by sustaining competitive markets and protecting the economic. the Environmental Protection Agency was created to monitor and analyze the environment. Since the 1980s. and work closely with state and local governments to devise pollution control policies.S.S. but more environmental laws and regulations were passed to assure the protection of the environment against both public and private actors who might fail to take account of costs or harms inflicted on the ecosystem. environmental. Geothermal Energy Research Development and Demonstration Act of 1974. & ENVTL. as the number one greenhouse gases emitter in the world. Ever since. . and the Energy Policy Act of 1992..S.360 TEMPLE JOURNAL OF SCI. but the legal systems of energy and the environment in the U. XXIV Among them. the focus of energy policy has been principally driven by the considerations of environmental protection and sustainable development. BACKGROUND: THE BRIEF HISTORY OF MODERN ENVIRONMENTAL ENERGY LAW AND POLICY IN THE UNITED STATES Throughout its history. In the U. bridging these two areas. Accordingly. the United Nations Framework Convention on Climate Change and the Kyoto Protocol are the key commitments and measures taken to control and reduce the amount of greenhouse gases released by the international community.S. are largely independent of each other. the Department of Energy was created and a national energy plan emerged for the first time in the U. Although the U. all of which are more environment-friendly than ordinary energy laws. in recent years. To that end.” Among the multitude of laws.” or “energy-environment law. It is well known that many environmental issues. In 1977. and security interests of the U. LAW [Vol. Wind Energy Improvement Act of 1980. TECH.S. II. are very closely related to energy activities. is not yet a member of these international documents. it faces pressure to reduce its greenhouse gas emissions. These laws and regulations are usually called “clean energy law. conduct research. the development and use of renewable energy is one of the most desirable ways to do so. with the breakout of energy crises and the environmental movement in the 1970s. there has been a shift towards deregulation of various energy industries. there are specific laws and regulations reconciling energy and environment directly. most belong to the area of renewable energy law. Biomass Energy and Alcohol Fuels Act of 1979. the U. the U. However.

and local levels. guaranteed bank mortgages that can be used to purchase or refinance homes using renewable energy. Department of Energy. Major Federal Laws. development.S. promoting increases in the production and utilization of energy from renewable energy resources. demonstration. provisions. c) Biomass Energy and Alcohol Fuels Act of 1979. 8) Public benefit funds. renewable fuels. such as direct funding to individuals. The programs provide various incentives. 12) Net metering rules. providing incentives for increasing production of geothermal energy. and exports of U. Major Federal Programs The federal government has a number of programs encouraging the research.S. state. providing incentives for development of wind energy systems. providing incentives for alternate. These programs are funded or supported by various federal departments. 361 III. g) Renewable Energy and Energy Efficiency Technology Competitiveness Act of 1989.S. THE LEGAL BASIS OF US GOVERNMENT TO PROMOTE RENEWABLE ENERGY A. 6) Leasing/Purchase incentives. encouraging the use of solar energy. the legal basis for the federal government to promote renewable energy is an evolving and complex system consisting of related laws. Department of Housing and Urban Development. including residents and businesses. and implementation of renewable energy technologies. renewable energy technologies and services. 5) Industry recruitment incentives. 2. 4) Rebates. Provisions and Programs In the U. b) Geothermal Energy Research Development and Demonstration Act of 1974. 11) Construction and design policies. 3) Loans incentives. including the Department of Agriculture. in particular Subchapter V— Renewable Energy. B. d) Energy Tax Act of 1978. promoting research. 9) Green power purchasing policies.No. development. Government Efforts to Promote Renewable Energy There is an abundance of well-developed legal instruments through which the government can promote renewable energy. h) Energy Policy Act of 1992. and the Small Business Administration. grants and loans to states and local . Major Federal Laws and Provisions The major federal laws and provisions in the United States are: a) Solar Energy Research and Development Act of 1974. wind technologies and other environmentally friendly energy technologies through the use of tax credits. f) Geothermal Energy Act of 1980. particularly at the state and local levels. e) Wind Energy Improvement Act of 1980.S. and programs at federal. Department of Veterans Affairs. 7) Production incentives. 1. Environmental Protection Agency. Department of Transportation. 1] Government Incentives to Promote Renewable Energy in the U. and commercial application of renewable energy and energy efficiency technologies. encouraging investment in solar. further advances of renewable energy technologies. and 13) Generation disclosure rules. sales tax and property tax). personal income tax. The following are the main government incentives: 1) Tax incentives (including corporate tax. 10) Renewables portfolio standards. U. enhancing geothermal use.. 2) Grant incentives.

including solar energy equipment that uses solar energy to generate electricity.18 In May 2003. but it does not fund or insure the financing.5 MW). LAW [Vol.S. and poultry waste energy projects. REPC. geothermal energy equipment used to produce. solar water and space heating. was expanded by the American Jobs Creation Act of 2004. Energy Efficient Mortgage (EEM) can be used by residents to finance technologies such as photovoltaics. Under the Solar and Geothermal Business Energy Tax Credit Program ensured by the Energy Policy Act of 1992. The EEM is intended to give the buyer of energy-efficient house additional benefits on top of their usual mortgage deal. geothermal energy. wind and geothermal property. and municipal solid waste. Section 710. was originally enacted as part of the Energy Policy Act of 1992. solar space heat. wind and geothermal electric. The Renewable Electricity Production Credit (REPC). distribute. Examples of Federal Programs ENERGY STAR financing and mortgages are offered by private lenders to give consumers the incentive to purchase ENERGY STAR-labeled products and homes. such as property of solar water heat.19 which was signed into law on October 22. federal government offers a ten-percent tax credit to businesses that invest in or purchase energy property. solar thermal process heat. through depreciation deductions. the REPC was extended once more as part of the Working Families Tax Relief Act of 2004 through December 31. increasing the bonus depreciation to fifty-percent in the first year that the equipment is purchased and placed into service. 2004. or to provide solar process heat. 2004. small irrigation power (150 kW . a per kilowatt-hour tax credit for electricity generated by qualified energy resources. has provided funding for fiscal years 2003 and 2004 for eligible agricultural producers and rural small 18 19 Section 101. In addition to the MACRS depreciation. then extended in March 2002 as part of the Job Creation and Worker Assistance Act of 2002. solar energy. closed-loop biomass. Both government-insured and conventional EEMs are available and are federally-recognized loan programs that can be applied to most home mortgages. closed-loop biomass. under the Job Creation and Worker Assistance Act of 2002. 2005. wind and geothermal property in the first year. XXIV governments. On October 4. solar thermal electric. a program of the Department of Agriculture. TECH. photovoltaics. Furthermore. to heat or cool a structure. Modified Accelerated Cost Recovery System allows industrial and commercial businesses to recover investments in solar. and energy efficiency in a new or existing home. & ENVTL. which formerly only applied to wind energy. or use energy derived from a geothermal deposit. The EPA allows lenders to use the ENERGY STAR label on financing products that meet EPA’s labeling criteria. All buyers who qualify for a home loan qualify for the EEM. .362 TEMPLE JOURNAL OF SCI. open-loop biomass. to cover the following items: wind. The Renewable Energy Systems and Energy Efficiency Improvements Grant Program. businesses can take an additional thirty-percent depreciation on solar. The Job Creation and Tax Relief Reconciliation Act of 2003 was signed into law. the U. and funding for research and development projects.

in consultation with the State Energy Resources Conservation and Development Commission. requires federal agencies to increase their use of renewable energy to a percentage determined by the Secretary of Energy.S. or federal sponsored financial incentives. After January 1. or $4. The California Franchise Tax Board. biomass and geothermal systems installed after 1990 qualify as renewable energy resources. The Executive Order 13.5% of the net installed system cost after deducting the value of any municipal. solar thermal electric systems. administers this program. 2003 through June 30.5% of their electricity from renewable resources by 2005. Provisions and Programs: Using California as an Example In addition to federal laws. The primary goal of this program is to stimulate market demand and to develop a self-sustaining market for emerging renewable energy technologies of photovoltaics. almost every state. In 2000. issued in 1999. which was enacted into law on September 22. whichever is less. C. The Agricultural Biomass to Energy Program was created by California Senate Bill 704. The Property Tax Exemption for Solar Systems is a product of the California Revenue and Taxation Code. Under this order. This program was designed and implemented by the Energy Commission.S. in consultation with the California Energy Commission. Active solar energy systems installed between January 1.123. the Secretary of Energy directed that federal agencies obtain the equivalent of 2. county. 2004 and before January 1. provisions. The requirements ensure that solar energy equipment is installed no later than January 1. 1999 and January 1. A fifteen-percent tax credit was available from Jan 1. The program was created to reduce the amount of agricultural fuels that are burned in open fields by providing financial incentives to eligible biomass facilities for each “green ton” of qualified agricultural biomass purchased and converted into energy by the facility from July 1. solar. 2006. fuel cells using renewable fuels. 2001 to Dec 31. solar. the tax credit is equal to 7. and city in the U. section 73. 363 businesses to purchase renewable energy systems and make energy improvements. or which derive hydrogen from biomass or water using wind. 2004. The following examples are drawn from the state of California. 2003. 2006 are not subject to property taxes when assessing property for property tax purposes. including those that derive energy from a wind. wind. The Emerging Renewables Program has been carried out by the California Energy Commission.50 per watt of rated peak generating capacity. 1] Government Incentives to Promote Renewable Energy in the U. biomass. has its own set of laws designed to promote renewable energy. geothermal source. The Solar or Wind Energy System Credit Program is comprised of personal and corporate income tax credits provided for the purchase and installation of photovoltaic or wind driven systems with a peak generating capacity of up to 200 kilowatts.No. solar. 2003. or geothermal energy sources. Existing and new building construction requirements have been established by the California Department of General Services. state. and small wind turbines that meet certain eligibility requirements. The General Picture of State and Local Laws. 2007 on all state . and programs promoting renewable energy. by offering rebates to reduce the initial cost to customers.

process water. wind. With previous commitments from Los Angeles World Airports and the city’s water system. fuel cells using renewable fuels. clean. photovoltaics. affordability and economic growth.S. The pieces of hardware (solar collectors. and domestic hot water. Municipal solid waste is only eligible if it is converted to a clean burning fuel using a non-combustion thermal process first. Affordable. ten-percent of the city government’s electricity purchases went towards new.364 TEMPLE JOURNAL OF SCI. renewable energy sources. the Los Angeles City Council approved the program and beginning in July 2001. 2001.” and the European Union energy policy declares that “Europe’s future depends on its energy supply being safe. and Environmentally Sound Energy for America’s Future. The Santa Clara Solar Water Heating Program is the nation’s first municipal solar utility. TECH. controls and storage tanks) are owned and maintained by the city under a rental agreement. digester gas. XXIV buildings and state parking facilities. ocean wave. On March 2. ocean thermal. California Senate Bill No. amounting to fourteen percent of the electricity used by the city government. and the environment and public health. where feasible. the focus of energy policy worldwide has been driven principally by considerations for the environment and sustainable . the City established the Solar Water Heating Program. LAW [Vol. & ENVTL. PERFORMANCE OF GOVERNMENT INCENTIVES TO PROMOTE RENEWABLE ENERGY IN THE UNITED STATES Three key objectives underlie current energy policy: reliability and security. solar thermal. The eligible renewable energy resources include biomass. established the program. 2002. geothermal. Solar equipment is offered by the city for the heating of swimming pools. That year. under which the City supplies. and that solar energy equipment shall be installed as part of the construction of all state buildings and state parking facilities that commences after December 31. the total city government purchase will be more than seventy million-kilowatt hours of new green energy.1078. ecologically sustainable and affordable.” Over the past ten years or more. installs and maintains solar water heating systems for residents and businesses within Santa Clara through its Water & Sewer Utilities Department. the National Energy Policy of the U. The Los Angeles Green Power Purchasing Program is one of largest purchases of renewable green power in the U. This purchase will amount to fifty million-kilowatt hours of electricity annually.S. and hydro energy (predominantly from tidal currents). The purpose of this solar rebate program is to encourage the use of renewable energy through the installation of photovoltaic systems by residents and businesses in Los Angeles. landfill gas. IV. 2002. The Los Angeles Solar Incentive Program is un by the Los Angeles Department of Water & Power Board of Commissioners. stresses “Reliable. signed into law on December 12. the City of Santa Clara has taken a leading role in developing and promoting the use of solar energy. small hydropower of thirty megawatts or less. For example. the renter pays an initial installation fee and a monthly utility fee. Since 1975. The Renewables Portfolio Standard requires that a retail seller of electricity purchase a specified minimum percentage of electricity generated by eligible renewable energy resources in any given year as a specified percentage of total kilowatt hours sold to retail end-use consumers each calendar year.

only about 3.. From a historical perspective. The global renewable energy market is booming.35 quadrillion Btu in 2003. and programs at the federal.S. the consumption of biomass energy declined from 3. Australia and other developed countries have. coal (twenty-three percent).S.108 quadrillion Btu in 2003. the progress of the renewable energy market and the diversification of the traditional energy prosperity appear to be frustratingly slow. despite great improvements and cost reductions of renewable energy technologies worldwide. However. both market forces and government support play roles in the development of renewable energy. will not exist until prices fall to competitive levels. but the U. mainly because of the great demand created by the Kyoto Protocol and other international environmental agreements. For example. ordinances. and nuclear sources (eight percent). the consumption in the U. or to provide energy independence and security. however. in the U. V.S. Whether the goal is to combat global warming. Japan.062 quadrillion Btu in 1989 to 2.S. in 2003. That level of demand for renewable energy devices.S. The level of government intervention in the renewable energy market is based upon relevant laws. attempts at promoting renewable energy sources. federal government on global warming. domestic market for renewably energy is declining. wind. With no further incentives for 20 21 Supra note 9.456 quadrillion Btu in 1989 to 3.. although the legal measures for the government to promote renewable energy are relatively well-developed. its strong and lasting support of fossil fuels industries. to encourage investment in a fast-growing new industry. See supra note 9.. regulations. CONCLUSION By observing the U. China can make several conclusions about renewable energy development.S.S.20 namely solar.022 quadrillion Btu in 1989 to 0.865 quadrillion Btu in 2003. through subsidy and regulations. and the consumption of wind energy increased from 0. The passive position of the U.3% of the energy consumed came from non-hydro renewable energy sources.No. The main problem is that manufacturing needs to be done on a large scale to reduce costs. and local levels. While the consumption of solar and geothermal energy remained almost unchanged. and the unequal playing field of the U. the actual implementation of renewable energy development is very limited. 365 development. Observers are confident that renewable energy sources will one day be cost effective and are becoming increasingly aware of environmental concerns associated with conventional power sources. which is much less than energy derived from petroleum (forty percent). because strong government support for fossil fuels leads to an unequal playing field in the energy market and an inferior position for the renewable energy industry.S. .S. biomass and geothermal energy. 1] Government Incentives to Promote Renewable Energy in the U. of non-hydro renewable energy sources21 declined from 3. In the U. are among the key elements that hinder the further development of renewable energy. many programs in Germany. Despite structurally sound renewable energy legal systems and government incentives for the renewable energy industry in the U. energy market. state. natural gas (twenty-three percent). created renewable energy markets.

For the successful development of a renewable energy industry in China.366 TEMPLE JOURNAL OF SCI. there must be a strong legal system to aid implementation and an equal or superior competitive position in the energy market. there will be little or no success in renewable energy production and consumption. XXIV reform and no greater support in substance to renewable energy technologies. . & ENVTL. TECH. LAW [Vol.