The U.S. House passed an $825 billion economic stimulus bill Jan. 28 containing $20 billion in energy tax credits and related financial incentives that are part of President Barack Obama’s plan to revive the American economy.
More than half of the stimulus package’s $20 billion in energy incentives, $13.1 billion over ten years, is for long-term extension of production tax credits for renewable energy production, including incremental hydropower and energy from ocean and hydrokinetic sources. The House Ways and Means Committee endorsed the package Jan. 22. (HNN 1/22/09)
The House passed the total economic stimulus package, 244-188.
The legislation would extend by three years, to the end of 2012, the date that wind facilities would have to be in place to be eligible for the federal renewable energy production tax credit. Other qualifying renewables facilities, such as small irrigation hydro, incremental hydropower, ocean energy, and biomass, geothermal, and landfill gas sources, also would have an extra three years, through the end of 2013, to be in service to get the same production tax credit.
Investment tax credit offered if production tax credit unavailable
Because many renewable energy projects are having a difficult time finding financing in current market conditions, the legislation would allow such facilities in place in 2009 and 2010 to temporarily claim a 30 percent investment tax credit instead of the production tax credit that is normally payable over a ten-year period.
The measure also would authorize $1.6 billion in new Clean Renewable Energy Bonds to finance public power development of facilities that generate electricity from small irrigation hydro, incremental hydropower, ocean currents, wind, biomass, geothermal, landfill gas, and trash burning facilities;
Senate Majority Leader Harry Reid, D-Nev., said he expected the Senate to begin debate on the stimulus plan Feb. 2. He said he wants to Senate to finish the legislation be the end of the week so it could begin negotiations with the House on a final bill to send to Obama before the congressional recess in mid-February.
The Senate Finance Committee approved a portion of its own stimulus bill Jan. 27, containing about $31 billion in tax credits and financial incentives to boost alternative energy supplies and promote energy savings. (HNN 1/28/09) The Senate tax package includes most of the tax breaks approved by the House, but the Senate measure adds more incentives to help alternative energy companies.
Both the Senate and House bills contain the long-term extension of production tax credits for renewable energy production, including incremental hydropower and energy from ocean and hydrokinetic sources. (HNN 1/21/09)
The Senate measure does more than the House to help alternative energy companies by allowing them to carry back their business credits from 2008 and 2009 for five years — instead of one year under present law — to offset their income taxes. The tax break would cost $11 billion over 10 years.
Total $825 billion package boosts infrastructure
The total $825 billion economic stimulus package was unveiled by House Democrats Jan. 15. (HNN 1/16/09) The bill also contains tax credits for research and development on energy conservation and efficiency.
Obama has urged developing clean energy sources and creating a new “green” economy. He has pledged to invest $150 billion over ten years to develop alternative energy, which he says will create 5 million jobs.
The bill also includes $32 billion to modernize the power transmission grid; $16 billion to retrofit some public housing to use less energy; and $2.4 billion to develop technology that allows coal-fired power plants to capture greenhouse gas emissions.
Some energy and water resources highlights of the bill include:
o $4.5 billion for environmental restoration, flood protection, hydropower, and navigation infrastructure;
o $2 billion in loans for drinking water infrastructure;
o $19 billion for clean water, flood control, and environmental restoration investments;
o $11 billion for research and development, pilot projects, and federal matching funds to modernize electricity grid;
o $8 billion for loans for renewable energy power generation and transmission projects.