By a vote of 236-182, the House on Feb. 27 passed the “Renewable Energy and Energy Conservation Tax Act of 2008,” which extends until the end of 2011 the in-service date for renewable energy facilities eligible for tax credits.
The bill would apply to wind, closed-loop biomass, open-loop biomass, geothermal, small irrigation, hydropower, landfill gas and trash-combustion facilities.
The bill includes a new category of marine renewables, including facilities that generate electricity from waves and tides. The bill would cap the aggregate amount of tax credits that can be earned for qualifying facilities placed in service after Dec. 31, 2009, to an amount that has a present value equal to 35% of the facility’s cost. The extension of the production tax credit is estimated to cost $6.57 billion over 10 years.
In addition, the bill extends the 30% investment tax credit for solar energy property and qualified fuel cell property for eight years, through the end of 2016. It also increases the $500 per half-kilowatt of capacity cap for qualified fuel cells to $1,500 per half-kilowatt of capacity.
The bill removes an existing limitation that prevents public utilities from claiming the investment tax credit and allows the energy credit to be used to offset the alternative minimum tax. It also authorizes $2 billion of new clean renewable energy bonds for public power providers and electric cooperatives, of which 60% must be used for qualifying projects of public power providers and 40% for qualifying projects of electric cooperatives. Qualifying projects include facilities that generate electricity from wind, closed-loop biomass, open-loop biomass, geothermal, small irrigation hydropower, landfill gas and trash-combustion facilities.
The bill pays for the renewable energy incentives by removing a number of deductions from the oil industry, a funding mechanism the Senate narrowly defeated in a December 2007 vote on a similar provision.
“The House of Representatives has once again passed a punitive tax increase aimed squarely at domestic energy production. This was a bad idea when it was first passed the House in January 2007, and it’s a bad idea now,” Senate Energy and Natural Resources Committee Ranking Member Pete Domenici, R-N.M., said in a Feb. 27 statement following the House vote. “The last thing we should be doing at a time when America is increasingly dependent on foreign oil is making it tougher to produce our own energy.”
Domenici accused House Democrats of using the renewable energy tax credits as a political football. “I strongly support extending these tax credits, and in fact pushed for their inclusion in the economic stimulus package,” he said.
Gregory Wetstone, American Wind Energy Association senior director of governmental and public affairs, praised the House leadership and members of the House Ways and Means Committee for moving quickly to extend renewable energy tax incentives.
“With 116,000 jobs and $19 billion in clean energy investment at risk from the looming expiration of the widely popular renewable energy tax credits, it is clear that prompt Congressional action on the Renewable Energy and Energy Conservation Tax Act of 2008 is essential to one of the fastest growing areas of the American economy,” Wetstone said in a statement. “We focus our attention now on the U.S. Senate, where we look forward to working with wind and solar energy supporters on both sides of the aisle to forge a bipartisan renewable tax credit extension. Such an effort is critical to our success in moving the bill through the Senate and all the way into law.”
Solar Energy Industries Association President Rhone Resch said that incentives in the House bill will greatly expand the use of solar energy, estimating that solar power “will provide 50% of all new electricity generated in the U.S. within eight years.”
Resch said it is now up to Senate leaders “to step up to the plate and find a workable path to pass this important bill. They must decide if they stand with the 85% of Americans who want clean energy and a more secure America or if they will maintain the status quo.”
By Kathleen Hart
27 February 2008
|Wind Watch relies entirely
on User Funding