Recovery Plan’s Renewable Energy Tax Credits and Incentives Debated in Senate Committee

Articles — By forcechange on January 27, 2009 7:07 pm

The Senate Finance Committee began debating on Tuesday the alternative energy portion of the recovery plan.  The House version of the package cleared the Ways and Means Committee last week.  This portion of the plan is expected to have around $30 billion in tax credits and incentives to increase energy efficiency and renewable energy production.

Both versions of the bill would extend wind energy credits through 2012, and extend similar credits for biomass, geothermal, small irrigation, hydropower, landfill gas and tidal energy power would be extended through 2013.

Addressing recent difficulties in acquiring financing for renewable energy projects (like Pickens’ Texas Panhandle wind farm), both Senate and House plans give investors in plants built in 2009 and 2010 a 30% investment tax credit instead of the standard credit that is normally spread out over 10 years. 

Reuters notes that other credits and incentives in the Senate and House bills would:

* Increase the tax credit for service stations that install pumps that dispense alternative energy fuels like hydrogen, natural gas and gasoline made from 85 percent ethanol;

* Give homeowners a tax credit equal to 30 percent (capped at $1,500) of the amount they paid for energy-efficient furnaces, hot water boilers and other energy savings improvements;

* Authorize $1.6 billion in new clean renewable energy bonds to finance facilities that generate electricity from wind, biomass, geothermal, small irrigation, hydropower, landfill gas, ocean currents and trash burning facilities;

* Allow states to issue $2.4 billion in conservation tax credit bonds to finance loans and grants to individual homeowners to retrofit existing housing;

* Provide individuals with a 30 percent uncapped tax credit for buying solar water heating property, small wind energy property and geothermal heat pumps.