Can Utilities Fill the Green Energy Finance Gap?

Given the limitations of tax equity financing that the financial crisis has exposed, however, Walsh suggested that using tax credits as a primary incentive for renewable energy in the United States "doesn't make sense long term." Instead, he noted, Congress should look at new forms of incentives, such as a national renewable portfolio standard, a carbon tax, a feed-in tariff similar to those in place in Europe, or "some combination of the above." (Don't miss "Europe Show's U.S. Wind Industry How It's Done" and "SolarWorld COO: U.S. Needs to Amp Up Solar Policy")

Eric M. Markell, executive vice president and CFO of utility Puget Sound Energy, agreed that new forms of incentives could better serve American renewable-energy growth.

"We think the production tax credit and investment tax credit have been an OK way to jumpstart the industry, but we're not sure that going forward it's the best way to lay a sustainable business model," he said.