Senate Passes Renewable Energy Tax Bill

House Approval in Question

The Senate overwhelmingly passed an historic $17 billion tax credit package designed to foster renewable energy investment. Tuesday’s 93 - 2 vote extends current tax relief for green energy technologies such as wind, solar and carbon sequestration up to 10 years. 

The $17 billion package has been estimated to bolster the economy with $232 billion in new spending while creating 441,000 jobs according to a report from the Solar Energy Association.  The bill’s passage is expected to pave the way for a 280-megawatt (MW) solar-thermal plant in Arizona in addition to many smaller projects with a combined electrical output estimated at 42,000 MW.  The resulting clean energy output is equivalent to 75 coal-fired plants.

Solar energy installation costs will be driven down by $2 billion in tax credits for the next 10 years.  Solar energy production will also benefit with another $6 billion in tax relief, while carbon sequestration technology receives tax incentives of $1.5 billion.  Wind-power projects will have current tax benefits extended for one year, while geothermal and biomass investment will be encouraged by two years of reduced taxes.   

The bill was stalled until a two-year tax benefit extension was included for refineries to invest in equipment for processing heavy oil from non-traditional sources such as tar sands and shale.  The legislation also provides relief for victims of Hurricane Ike that struck the Texas coast 13 days ago.

Prior to becoming law, the bill must still be approved by the House and signed by the President.  Senate Majority Leader Harry Reid (D-NV) warned House members not change the legislation according to a report at Bloomberg.com, because an amended version will not pass the Senate.

The President is expected to sign the Senate bill despite his previous opposition to it based on the belief it will raise the price of gas.  Sources on Capitol Hill informed Writer to the World yesterday that the President threatened to veto a House version of clean energy legislation that offsets some costs with additional taxes.  The House bill also excludes the credits given to fossil fuel production in the Senate version.

Congressman Roscoe Bartlett (R-MD), a heroically staunch advocate of many years for a move away from fossils fuels said late yesterday, ” … the Senate bill is the only legislative vehicle to continue many important tax incentives that has enough votes to become law this year.”  

The House is scheduled to vote on its bill today.  Expect updates at Writer to the World.