Las Vegas, and more broadly speaking, the entire state of Nevada, is on the leading edge of a burgeoning industry that we in Alberta ought to pay some attention to. Nevada is going all in on renewable energy.
The state’s Republican Governor Brian Sandoval just last month signed a total of 11 renewable energy bills into law that cover everything from boosting solar production to net-metering, a move that will reimburse Nevadans who contribute renewable power to the grid.
However, Nevada’s legislative agenda is only one side of the renewable energy equation.
The Silver State has gone to great lengths to make renewable energy as attractive as possible to would-be investors. The state does not collect corporate income tax. Of course, the billions pumped into state coffers from casinos certainly helps, but this is a huge competitive advantage when it comes to luring investments. Nevada also doesn’t have a minimum payroll tax, franchise tax, or corporate shares tax. Make no mistake, this matters to investors.
They’ve also loaded up on all kinds of tax incentives to bring renewable energy into the state, which has resulted in billions in new investment from giants like Telsa, Vivint and Sunrun. We can debate the merits of such tax policy in another column, but I think most would agree that tax incentives trump across-the-board tax increases any day of the week.
Which brings me to Alberta.
The Alberta government is currently engaged in a massive endeavour to green the electricity grid by phasing out coal-fired power plants in favour of renewable energy sources. The province has set an ambitious target of having 30 per cent of all power generation in Alberta come from renewables by 2030. To get there, they say they need $10.5 billion in private investment. This is in a province that has seen capital flee across borders to more competitive jurisdictions over the last several years in response to low energy prices and increased corporate taxes.
Unlike Nevada, Alberta is hardly competing for investment. Instead of lowering or eliminating taxes, Alberta has raised just about every tax, levy, and business input cost available. From corporate taxes to royalties to wages to labour costs, it is now harder than ever to invest and succeed in Alberta. As such, any tax break or subsidy we might offer would be offset by the patchwork of additional costs the government has created. We are sending all the wrong signals to investors at a time when we need it the most.
In December, the City of Las Vegas became the largest city in the country to have its entire municipal operation – all 140 of its properties and facilities – powered by renewable energy. This does not mean that every hotel and casino along the strip now only uses wind and sun to light up the sky, although that day may very well be coming.
The majority of Nevada’s electricity still comes from fossil fuel, but their dramatic uptake of renewable energy should be noted and studied here in Alberta. Essentially, we are trying to do what Nevada has already done, but we’re going about it exactly the wrong way.
Let’s ditch the tax and regulate approach and start building our capacity for renewable energy the right way: by competing and winning.