Senate Considers Renewing Clean Energy Tax Credit

The government has at its disposal a number of tools to encourage development of clean energy sources. Congress could release additional funds to research institutions, attach requirements to state funding, change federal permitting standards, etc. Unfortunately, we're still waiting on a comprehensive energy policy that would utilize all of these tools, so in the meantiem we must make do with tax credits.

You may have heard of the Renewable Energy Tax Credit that is set to expire at the end of this year. The credit provides several benefits to those interested in creating sources of clean, renewable energy. For solar energy, the government pays 30% of the cost to businesses to invest in solar power to meet their energy needs. The government will pay 30% to residential energy users for installing solar panels, geothermal heat pumps or small wind equipment. For production of renewable energy, the government will pay 1.9-cent per kilwatt-hour to help make renewable energy most cost competitive with coal and natural gas energy. 

Already these tax credits have been effective at encouraging the growth of renewable energy. Big box stores have begun installing solar panels on the roofs of their buildings to offset their energy needs. Nationwide, there are 22 major solar power plants in the planning phase.

The progress made as a result of the renewable energy tax credit could be dramatically threatened if Congress doesn't renew the credit. In an area 70 miles southwest of Phoenix, a Spanish engineering company is planning the largest concentrated solar power plant in the country. They have said the plant cannot be completed if the tax credits are not renewed. Back in 2004 when Congress failed to renew the credit, investments in wind energy dropped by 77%. 

Yesterday the Associated Press reported that the Senate has broken a months-long impasse on a tax break package that would include the renewable energy tax credit. Legislation including this tax break package should hit the Senate floor this week. The Senate has set aside $17 billion in clean energy tax incentives, the funds for which would come from freezing tax breaks for oil and gas companies. 

Call your Senator and urge them to vote "yes" on this energy package. Its the right step in making America the leader in renewable energy manufacturing. 

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