Senate Passes Extensions for Renewable Incentives; House Future Uncertain
The U.S. Senate Thursday moved forward with its version of an extension of tax credits for renewable energy. But it did so without identifying how to pay for the estimated $6 billion in incentives for wind, solar and other projects.
Introduced by Sens. Maria Cantwell, D-Washington, and John Ensign, R-Nevada (pictured), only a week ago (see Climate Law Update story), the Clean Energy Tax Stimulus Act (see text here) was grafted as an amendment onto a housing bill before the Senate. Lawmakers adopted the energy amendment on an 88-8 voted and passed the entire bill 84-12.
In many ways, the Senate bill is roughly similar to a measure the House passed earlier in the year extending incentives known as the investment tax credit and the production tax credit. The renewable industry has been pushing hard for Congress to adopt some kind of legislation extending credits which expire at the end of the year.
Both bills provide short-term extensions of credits for producing electricity from renewable sources and for a longer period, until 2016, for business investment tax credits for solar and fuel cell projects. Residential solar and energy efficiency projects would also benefit under the Senate bill.
But the major difference in the Senate legislation lies in the fact that bill avoided the House approach of funding the incentives through reducing tax breaks for the oil industry. Instead, the Senate bill contains no identified funding mechanism. That could give the bill a difficult road in the House.
However, Ciaran Clayton, a spokeswoman for Cantwell, told Climate Law Update that the senators felt it was more important to move ahead with the legislation quickly. She said efforts were continuing with the Bush administration and lawmakers in the House to find ways to pay for it.
“If companies don’t have some assurance that these incentives are going to be extended they are going to be dropping projects in the next quarter or two,” Clayton said.
Ensign, in a written statement (see full text), stressed the perceived urgency of the matter: "We only have a small window of time to provide the certainty needed to continue investing in, producing and developing renewable energy.”
In her own statement, Cantwell said the legislation could provide up to $500 in tax savings for consumers who install energy efficient products in their residences and support the deployment of enough solar energy in the next few years to power more than a million homes (see full text). She also touted the economic benefits of the credits, saying they not only provide some certainty to the renewable energy industry but also create “high-paying, long-term jobs to help Americans get through these tough economic times.”
The Senate action also drew praise from environmentalists. A Sierra Club official, Melinda Pierce, issued a statement (see full text) saying the vote “recognizes the urgency of the situation.” She warned that failure to extend the incentives immediately would “deal a crippling blow to the rapidly growing clean energy economy.”
(Photo of Sen. John Ensign courtesy of his office)
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.