U.S. Senate approves renewable credits
September 23, 2008 - Exclusive
By Emma Ritch, Cleantech Group
Email Ikea GreenTech
Tax measure extends incentives, but bill must now get the OK from the House and President Bush.
The immediate future of renewable energy incentives in the U.S. looks a little brighter.
The U.S. Senate today voted to extend $17 billion in tax credits for renewable energy, following a similar move last week by the House of Representatives.
The tax credits, due to expire at the end of the year, now must be reconciled with those approved by the House before heading to the president, who has said he will likely support the measure. The House is expected to take up the bill Wednesday.
If enacted, the Senate bill:
* Extends tax credits by eight years for residential and commercial solar systems, one year for wind energy, and two years for other renewable energy sources, such as wave and ocean tide.
* Gives a 30-percent tax credit to homeowners who install solar systems and businesses that install solar, wind, geothermal and ocean energy systems.
* Gives a 10-percent tax credit to homeowners for energy-efficiency improvements, such as insulation, replacement windows, water heaters and heating and cooling equipment.
* Offers a tax credit of $2,500 to $7,500 for plug-in electric cars, depending on the battery capacity of the vehicle.
The renewable tax credits are part of a larger tax bill that provides incentives to businesses and a one-year patch to the Alternative Minimum Tax. The bill passed 93-2—in stark contrast with multiple votes earlier in the past year that repeatedly defeated the extensions (see Shock and disappointment over U.S. energy bill and GE fights to keep tax credits alive).
The entire package will cost more than $100 billion over the next decade. The energy credits are funded by limiting tax breaks for the oil and gas industry.
Last week, the House approved a bill that gave a one-year extension for wind and a three-year extension for other renewable energy projects (see U.S. House backs cleantech bill). The House bill would also require utility companies to generate 15 percent of their electricity from renewable resources, such as wind power, biomass, wave, tidal, geothermal and solar, by 2020. The bill allows utilities to meet up to 4 percent of that target through energy efficiency.
Finance Committee Chairman Max Baucus, D-Mont., released a statement praising the bill for the potential to create jobs. The eight-year extension could triple employment in the sector to 440,000 in 2016, according to a study by the Solar Energy Industries Association.
The wind industry has said that an extension could help make wind viable enough to generate 20 percent of the nation's total electricity needs by 2030 (see Wind power push could depend on incentives).
And solar companies have said an eight-year extension was needed to allow large-scale utility projects. Barry Cinnamon, CEO of Akeena Solar, said today that it’s essential for the House to approve the eight-year extension for solar and the removal of the current cap of $2,000 on the residential tax credit.
“We know with certainty that the extension of these credits sends out a green ripple effect: Solar projects on hold can now move forward, America creates new green-collar jobs with over 214,000 in California alone, and businesses and homeowners can count on lower energy bills in a time of economic hardship," he said. |
