The U.S. House and Senate introduced separate bills last week that would extend tax credits for the renewable industry beyond the usual one-year extension.
The Ways & Means committee of the House unveiled H.R. 5351, which includes a three-year extension of the production tax credit (PTC). The bill provides for a full-value credit for the first year and then through a complex formula caps the aggregate amount of tax credits at 35% of the facility’s cost in the following two years.
The bill also would create a new 30% investment tax credit (ITC) for purchases of small wind systems; that credit would be capped at $4,000 per installation. An extension of the 30% investment tax credit for solar energy property and qualified fuel cell technology also is included.
H.R. 5351 also would repeal tax breaks for the oil and gas industry. The House is expected to pass the vote as early as February 27, according to the American Wind Energy Association. However, the Senate has twice failed to pass similar legislation.
In the Senate, Amy Klobuchar, (D-Minn.), Olympia J. Snowe, (R-Maine), and Maria Cantwell, (D-Wash.), introduced the American Renewable Energy Act that proposes to extend the PTC for five years–a measure that would thrill the renewable energy industry, which claims longer incentive periods are need to create a more stable investment environment.
The Senate bill also would create a renewable electricity standard, requiring utility companies to purchase 20% of their electricity from renewable sources by the year 2025. A similar proposal was strongly opposed by Republicans last year.
Last week Reuters reported that Democratic Congressional leaders were prepared to take up energy and climate change issues in the House and Senate after returning from the Presidents’ Day Recess.
Meanwhile, more than 350 leaders in the renewable energy industry ranging from small business owners, venture capitalists, investors, associations and academics today called on Congress to pass ITC and PTC extensions before March 1, 2008.
"We are hopeful that the Congress will recognize the message that comes from over 350 leaders in renewable energy making a single ask: to extend the ITC/PTC this month," said Michael Eckhart, President, American Council On Renewable Energy. "This is not a partisan issue. It is an economic issue."
ACORE warns that without the immediate passage of the ITC/PTC extensions this month Congress will jeopardize 42,000 MW of planned renewable energy projects currently in development in 45 states–an amount equivalent to 75 base load electricity generation stations.
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