What's next for the energy bill?

"There is a fundamental sea change that is happening," David Kopans, director of regulatory affairs at Fat Spaniel Technologies, told the Cleantech Group today.

The U.S. House of Representatives, which passed its version of an energy bill late Saturday night, is calling for utilities to generate 15 percent of their electricity from renewable sources like solar, wind and geothermal by 2020.

Whether or not the renewable portfolio standard in the House bill becomes law this year, Kopans predicted that someday, "It will happen."

Currently there are 24 states plus the District of Columbia that have RPS policies in place, according to the U.S. Department of Energy.

Together these states account for more than half of the electricity sales in the United States (see New Colorado Governor positions on renewable energy).

But this is the first time an RPS policy has made it into a national bill.

"It's not a matter anymore of if, it's clear it's become a matter of when, and how," said Rob Day, principal with @Ventures.

He said that even if the most forward thinking parts of the bill are lost by the time it gets signed, "Everybody's looking out at 2009 and beyond."

The White House has already threatened to veto the bill, even though as Texas governor President George W. Bush signed legislation requiring utilities in his state to produce more power from renewable sources.

The administration has said that renewable portfolio standards are "best left to the states."

"I think the RPS is going to be a tough road to hoe," Kopans said, but that it should be doable.

"Going from the 20 percent down to the 15 was an important move," he said.

And with many states already pushing their own incentives, things still look rosy for renewable industries even if the bill is shot down.

And the market is bigger than just the States.

CIBC World Market's Adam Hinckley, talking about the solar industry, said he still sees "global demand growing about 40 percent annually for the remainder of the decade without a U.S. federal incentive program."

He noted in a report today that, "A national RPS could help drive this growth rate higher, but state initiatives by California, New Jersey, and others are resulting in increased domestic demand."

Hinckley said that Bush is not likely to sign an energy bill unless it does more to encourage domestic oil and gas production, something that made it into the bill passed in 2005 by the Republican-controlled Congress.

That legislation promoted greater production of traditional energy sources, such as coal, oil and nuclear power.

While some have argued that nuclear is green, (see Nuclear power is green power, says expert) there's no mention of the word in any of the 786-pages of the House bill.

The Senate version, passed in June and topping out at a svelte 277-pages, does allow, under an electric vehicle pilot program, for the use "of electricity generated from nuclear energy as an additional source of supply." (see Shock and disappointment over U.S. energy bill)

Another sticking point is likely to be the $16 billion in tax incentives that the House bill would rip away from Big Oil and put toward renewable energy.

Although the House bill didn't touch on vehicle fuel efficiency, the Senate version approved hiking fuel standards to 35 miles per gallon by 2020.

U.S. automobile executives have said that could hurt already struggling Detroit automakers like General Motors and Ford Motor.

The House bill also includes things like appliance efficiency standards, green building codes and requiring installation of new pumps that can handle ethanol fuel.

Once the lawmakers in the House return from their month-long recess, which began today, the bill will be sent to committee, where it must be reconciled with the Senate version.

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