Bioenergy, Energy Efficiency, Geothermal, Hydropower, Project Development, Solar, Wind Power

Renewable Energy Tax Credit Legislation Voted Down in U.S. Senate

A bill introduced by Senate Tax Committee Chairman Max Baucus (D-MT) and Senate Majority Leader Harry Reid (D-NV) containing a one-year renewable energy production tax credit (PTC) extension and a small wind turbine investment tax credit has failed to move past a Cloture Vote in the U.S. Senate once again.

The American Wind Energy Association’s (AWEA) senior director of governmental & public affairs Gregory Wetstone said that the failure by the senate to move forward to consideration of the bill will cost the U.S. economy 116,000 jobs and nearly US $19 billion for the wind industry alone.

“Thoughtful Americans, including Al Gore and T. Boone Pickens, have recently put forth visionary proposals to address our greatest energy challenges with an enhanced commitment to renewable energy. But we have to begin by continuing the one major federal policy we have that promotes renewable energy — the renewable production tax credit,” Wetstone said.

Rhone Resch, president of the Solar Energy Industries Association (SEIA) said that the solar industries are running out of time before they begin to lose contracts and projects get put on hold.

“Time is running out to extend the solar tax credits and without passage in the immediate future, tens of thousands of jobs and billions of dollars will be lost in new solar investment. Already companies are putting projects on hold and preparing to send thousands of jobs overseas — real jobs that would otherwise be filled by American workers. Failure to extend the solar tax credits is a severe blow to an industry that has proven to be an economic engine for the U.S. at a time when we need it most,” Resch said.

The Senate bill, S. 3335, contains a one-year PTC extension at its current value. After December 31, 2009, any further extension would include the “presumption” of a cost cap, which would, through a complex formula, put a ceiling on the value of the credits of no greater than 35% of project value. The small wind ITC has a cap of US $4,000 per system. The 10-year cost for the PTC, including all technologies to which it applies, is projected to be approximately US $7 billion, while the ITC, which includes solar, would cost approximately US $907 million over 10 years.

The bill also includes provisions to extend through 2014 the tax credits for solar energy, fuel cell and microturbine property, as well as the residential energy efficient property tax credit. Marine renewable energies could also benefit from the bill as credits to build wave, tidal, current and ocean thermal energy conversion systems of at least 150 kilowatts (kW) are extended through the end of 2011.

The 10-year cost for the PTC, including all technologies to which it applies is projected to be approximately US $7 billion, while the ITC, which includes solar, would cost approximately US $907 million over 10 years.