Senate energy tax deal trims credits on renewable energy
Senate negotiators made significant cuts in proposed extensions of tax credits for wind and other forms of renewable energy in order to reach a bipartisan compromise that is expected to pass the Senate this month.
The new Senate energy tax legislation, details of which were released Wednesday afternoon, would extend tax credits for wind energy production for one year only, through 2009.
Tax credits for geothermal, biomass and other renewable energy sources eligible for the production credit would be extended for two years, through 2010.
The solar energy investment tax credit would be renewed for eight years through 2016, as would tax credits for residential solar projects.
The Senate deal would make the residential solar credit much more generous by removing the $2,000 cap, which covers just a small fraction of what a typical residential solar-electric system would cost.
Senators shortened extensions on tax incentives for wind and other forms of energy in order to trim the cost of the total package to $17 billion over 10 years.
Democrats wanted to ensure that the entire package was offset with new revenue, to keep the deficit down.
Republicans balked at many of those revenue offsets, labeling them tax increases, but ultimately agreed to a total of about $17 billion.
Senate negotiators also tightened up rules on a tax credit for biodiesel, and shortened to one year other tax credit extensions, such as the credit for energy efficiency improvements to existing homes, in order to trim costs.
Timing for consideration of the package remains unclear in the Senate, but a final vote may not come until next week.
If the Senate approves the energy tax package as expected, it will still have to reconcile it with a House-passed energy tax bill.
House energy legislation passed last night would extend wind tax credits for one year, but would grant a three-year extension to geothermal, biomass and other sources eligible for the production tax credit.
The House bill also would cap benefits available under the production tax credit, starting in 2010, at 35% of the cost of the initial investment in a power facility.
The Senate compromise deal includes no such cap.
By Martin Vaughan, Dow Jones Newswires
[via Yahoo! Message Boards]
17 September 2008
Tags: Wind power, Wind energy
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