One of the biggest hurdles that green energy efforts have to overcome is that they are not entering a free market system. This may come as a surprise to some folks at Fox News who as recently as February of last year were wondering if “our free-market system is disappearing in America“; but in fact, no, we havent had one since, well, probably since lobbyists have existed to find ways to introduce tax breaks and exemptions.
One example of this disparity is that currently, alternative energy firms cannot take advantage of the financial investment tool of Master Limited Partnerships (MLPs). MLPs can raise capital by issuing shares in the stock market, but because they are treated as partnerships, they are taxed as shareholders but not at the additional corporate rates that face publicly traded corporations. MLPs were authorized by the federal government in 1980, and oil, gas, and coal companies have used these partnerships extensively. However, ethanol and biodiesel were only added as recently as 2008, and other forms of biofuels and newer energy technologies are not included.
Recently, the House and Senate introduced bills that would expand the applicability of MLPs to 14 new technologies including solar, wind, biomass, and even energy efficient buildings, among others. The Master Limited Partnerships Parity Act could potentially open billions of dollars of capital to these alternative energies that have been available to traditional fuel sectors for decades. I emailed my rep to ask for his support and co-sponsorship on this important bill; the Union of Concerned Scientists has a link here where you can fill out a form to do the same. And they also have a blog post where you can read more about the topic of MLPs and why its important to give alternative energies access to this financial tool.