U.S. renewable energy faces weak economy, old grid

By Tom Doggett - Analysis

WASHINGTON (Reuters) - U.S. President Barack Obama set the goal: double U.S. renewable energy production in three years. Congress provided the incentives as part of the $787 billion stimulus package.

Still, it may take awhile for solar and wind energy companies to get new business and the smart grid to transmit those power supplies.

People in the industries say the stimulus will help speed the process, but it still may not be fast enough to meet the Obama administration's goal of ramping up renewable energy production and related investments to revive the economy.

The stimulus extends tax breaks for generating electricity from renewable sources. The government also will provide incentives for homeowners and businesses to buy solar power equipment, and will help fund other energy-saving measures.

But with the U.S. recession expected to get worse, consumers are worried about losing jobs and paying bills and may not take advantage of alternative energy tax breaks. Also, many businesses are cutting costs and credit is tight.

"We need reassurances that it will be green and low-carbon energy coming online. But we also need assurances that it will be built -- that it will be built fast," said Bracken Hendricks, senior fellow at the Center for American Progress.

Even if demand for renewable energy surges, moving those power supplies will pose problems. The electricity grid is little changed from the one that powered the radios that carried President Roosevelt's fireside chats in the 1930s.

"What we have to do as well is figure out how we're going to get the grid upgraded, which is part of the economic recovery package, so that we can get the energy from where it is being produced to the areas where it will be consumed," said U.S. Interior Secretary Ken Salazar, whose department oversees the federal lands where new transmission lines may be built.