Senators Introduce New Renewable, Energy Efficiency Tax Credit Bill
Legislation extending tax credits for renewable energy including wind, geothermal and solar for at least a year was introduced Thursday in the U.S. Senate by a bipartisan group of lawmakers. The move drew immediate praise from the solar industry.
Senate authors of the measure, who left out a controversial hit on the oil industry that was contained in a recent House bill, hoped to break a logjam that has blocked progress on keeping incentives for renewable energy in place. Backers stressed the need to act quickly, with billions of dollars in projects possibly on the line. The bill also includes financial encouragements for energy efficient buildings, homes and appliances.
Introduction of the Clean Energy Tax Stimulus Act of 2008 in the Senate (see bill summary and text), comes more than a month after the House passed its own multi-year extension measure. The Senate legislation is sponsored by Sen. Maria Cantwell, D-Washington (pictured), and Sen. John Ensign, R-Nevada. It has 21 other co-sponsors. Cantwell urged swift action (see full statement):
“Critical tax incentives are set to expire this year. If both houses of Congress don’t pass a bill, and the president doesn't ’t sign it into law within the next one to two months, we will start to see as much as $20 billion of anticipated investments in 2008 delayed or canceled. This could result in more than 100,000 U.S. jobs lost at a time when the country is skidding into a recession, and energy prices keep getting higher.”
Unlike the House bill, a spokeswoman for Cantwell said the Senate legislation contains no reduction in tax breaks for petroleum production to pay for the renewable incentives, a provision that some had predicted would doom the lower chamber’s bill (see Climate Law Update story). However, that leaves it unclear how the estimated $6 billion in tax incentives would be funded.
“We're looking at a lot of different options about how to get it paid for," Ciaran Clayton, communications director for Cantwell, told Climate Law Update. She declined to be more specific.
Renewable energy proponents have been pushing hard for an extension of the tax inducements, which expire at the end of this year, arguing a lapse could jeopardize tens of thousands of megawatts of new projects, billions of dollars in investments and more than 100,000 jobs (see Climate Law Update story). The number of years to extend the credits has been an issue, with Cantwell herself previously advocating that the renewable production tax credit be extended to 2013.
The Senate bill would extend for one year an income tax credit for the production of electricity from renewable sources such as wind, geothermal, biomass and hydro. That would allow the credit to apply to facilities placed in production through 2009. The House-passed measure would extend that deadline to 2011. Both bills also would stretch the 30 percent business investment tax credit for solar and fuel cell projects through 2016.
The Senate bill also extends other incentives, including tax credits for residential solar and energy efficiency improvements, and a program under which public utilities can issue bonds for renewable energy projects.
A coalition of renewable energy groups and large and small businesses and environmental organizations also sent a letter to senators Thursday urging passage "as soon as possible" of legislation extending tax credits for "energy efficiency and renewable energy technologies and consumer purchases of energy efficient products." The remarkably eclectic list of signers included such names as the Natural Resources Defense Council, the Dow Chemical Company, Duke Energy, Edison Electric Institute, American Council on Renewable Energy, The Home Depot Inc. and the Coalition on the Environment and Jewish Life (see text of letter).
Despite such diverse support, efforts to keep the credits on track have narrowly failed. In early February, the Senate fell one vote short of defeating a filibuster blocking an amendment to an economic stimulus bill that included an extension of renewable incentives.
"We're just looking for that one last vote," said Clayton, Cantwell's spokeswoman. She said backers were hoping to move the bill "quickly, and also gain momentum and support for it."
Ensign, in an apparent reference to the decision to leave the oil industry untouched, stressed the need to move forward (see full statement):
“We have an opportunity to break the stalemate in the Senate. Especially at a time when our economy is struggling, we should not be increasing taxes to pay for incentives. These incentives are necessary for our energy security and to help jumpstart our economy.”
An advocate for the solar industry immediately backed the new legislation. Rhone Resch, president of the Solar Energy Industries Association, called the bill “a much-needed shot in the arm for our ailing national economy” and he pledged to work with the lawmakers for a long-term extension of the investment tax credit (see full statement).
(Photograph of U.S. Sen. Maria Cantwell, D-Washington, via Wikipedia)
