Clean Energy Tax Credits Will Not Be Extended Without Funding

  • Published on April 8th, 2008

paygo.gifFederal renewable energy tax credits, Congress’ favorite subject to debate but do little about, has once again been brought to the Senate floor. But because the amendment still has no funding mechanism suitable for pay-go rules, I would argue it stands little [social_buttons] chance of passage. Pay-go compels new spending and tax law changes to not add to the federal deficit, or if they do, they must create some sort of offset somewhere else in the budget [read more about pay-go].

In a wonky twist that would alter the clean energy incentive structure in this country rather significantly, Senators Alexander (R-TN) and Kyl (R-AZ) offered an amendment (S. Amdt 4429) that would extend the production tax credit for two years (instead of one) for wind, geothermal, biomass, landfill gas, small hydro, and wave and tidal power.

But the provision would also cut the production tax credit for wind in half and spread the funding out more evenly across technologies.

“I would argue that wind is over-subsidized,” said Alexander. “Wind is a proven technology… and this amendment would focus on emerging baseload technologies.”

The amendments are being considered as part of a housing and foreclosure package and they are completely unrelated to the House’s Renewable Energy and Energy Conservation Tax Act (H.R. 3221), which would have rolled back tax breaks for oil companies in order to pay for the renewable tax incentives. The tax package last fell short of passage in the Senate in February – by a margin of one vote.

‘Feast or famine’ Cycles of Clean Energy Development (CleanTechnica)

About the Author

is the founder of ecopolitology and the executive editor at LiveOAK Media, a media network about the politics of energy and the environment, green business, cleantech, and green living. When not reading, writing, thinking or talking about environmental politics with anyone who will listen, Tim spends his time skiing in Colorado's high country, hiking with his dog, and getting dirty in his vegetable garden.
  • Tom – I tend to agree with you that RE tax credits will pass at some point. I just don't know if that point is now. I actually thought the credits had a better chance as being part of an economic stimulus package (that wouldn't have violated House spending rules). My concern is that unless there is a way to pay for these tax credits, they will just contribute to an already skyrocketing national debt. We cannot continue to borrow from future generations at the rate the current administration is comfortable with. To be honest, it is truly astounding to me that we continue to do so.

    With that said, I am a strong advocate of renewable energy, but I'm not totally convinced that federal tax credits are the most effective or efficient way of building a clean energy presence in our national portfolio.

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  • Actually, the renewable energy tax credits stand a very good chance of being extended, for the simple reason that they are overwhelmingly popular, with the general public and with Congress as well. The question is not so much whether they'll be extended as when, due to the process hangups you mention. With 116,000 jobs and $19 billion in new investment at risk, we are hoping it's soon. Folks who support renewable energy should contact their Senators through powerofwind.org today.

    Regards,

    Thomas O. Gray

    American Wind Energy Association

    <a href="http://www.powerofwind.org” target=”_blank”>www.powerofwind.org
    <a href="http://www.awea.org” target=”_blank”>www.awea.org