Clean Tech Pops the Bubbly

I failed to mention the great news from late last week, when Congress passed renewable tax credit extensions as part of the larger bailout bill:

After months of frustration, Silicon Valley scored a major political victory Friday as Congress and President Bush extended renewable-energy tax credits that, just days earlier, seemed doomed to expire at the end of the year.

The news triggered a wave of celebration and relief within the companies that make solar cells and high-tech windmills. Some executives hauled out Champagne. Solar power advocates in San Francisco threw an impromptu party at a downtown bar.

“It’s a fantastic day for the renewable-power industry,” said Julie Blunden, vice president for public policy at SunPower Corp. of San Jose, after picking up a bottle of bubbly. “This is one of those few times when you can tell you’re at a turning point.”

Unfortunately, the wind industry probably should leave the Champagne corked. They only received a one year extension on the Production Tax Credit, which will have to be renewed again next year.

And with the credit crisis, it may become more difficult for solar and wind companies to raise the capital they need to build the enormous installations theyplan to build in Arizona and Texas.

Renewable Tax Credits Refuse to Die!

Now lawmakers are trying to tie them into the Senate’s larger financial bailout bill, according to E&E:

The Senate has added an extension of expiring renewable energy tax credits and other tax breaks to the Wall Street bailout bill set for a vote tonight.

It is unclear how the unexpected addition of the tax package to the $700 billion economic rescue plan will affect the measure in the House, where Democratic leaders have been reluctant to bring up the Senate tax bill.

And round and round we go again…

9th Time’s the Charm?

The Senate extended renewable energy tax credits on its ninth try last night. (Although as I wrote yesterday, the bill is a mixed bag and contains tax breaks for dirty fuels.)

The bill now goes to the House, where it might face opposition from conservative Dems who want everything balanced out with new revenue elsewhere.

So basically…everything’s still in limbo.

On Tax Breaks, Should Congress Accept the Bad With the Good?

In Washington these days (and I suspect for most of our nation’s history), it’s hard to pass even the most popular legislation without it being amended, diluted, and sometimes poisoned with add-ons.

The Baucus-Grassley energy tax bill is a perfect example. Several provisions are just what we need to support the renewable energy industry and fight climate change. Via Earth2Tech:

• Extension of the Production Tax Credit: The production tax credit for power generated via wind would be extended for one year and would extend for two years a similar credit for tidal and wave energy generation.
• Extension of the Investment Tax Credit: The 30 percent tax credit for investing in solar, wind, geothermal and ocean energy equipment would be extended eight years, including residential solar installations.
• Energy Efficiency Tax Credit: Homeowners could claim a 10 percent investment credit for eight years on energy efficiency measures like insulation and efficient windows, water heaters and heating and cooling equipment.
• Plug-In Electric Cars Tax Credit: Consumers could collect a tax credit of $2,500 to $7,500 for the purchase of a plug-in electric car, depending on the capacity of the battery.

A large Congressional majority supports these kinds of tax breaks, and the only reason they’ve stalled out is the question of how to pay for them.

But rather than keep things simple (and green), Baucus and Grassley shoehorned language into the bill that supports “dirty fuels” like liquid coal. Not surprisingly, the enviro groups don’t like that one bit:

However, the bill currently contains several controversial provisions on dirty fuels that we urge Congress to strip before the bill becomes law. These dirty liquid fuel provisions in the bill would be a major setback in efforts to solve global warming. Extraction of these fuels – tar sands, oil shale and liquid coal – can produce more than twice the amount of global warming pollution as conventional oil. Supporting these fuels through tax incentives is completely at odds with mandatory carbon reductions that we expect Congress will enact in the near future.

Should Congress simply swallow the bill as is, or should supporters of a truly “clean” tax bill hold out for better legislation?

Personally, I don’t think clean energy supporters should back down, especially when they have popular opinion behind them. But what do you think?

Renewable Tax Credits Still Not Renewed

E&E reports:

[A]s the 110th Congress reaches its final stages, credits that are popular on both sides of the aisle remain hung up in a dispute over whether and how to pay for them.

The battle has dragged on long enough to put projects and jobs in jeopardy due to the uncertainty, industry officials say. For example, the Spanish company Abengoa plans to build a large solar plant outside Phoenix that will sell power to Arizona Public Service Co., but the plan may falter without the credit, project officials say. Some credits for energy efficient homes and buildings have already lapsed. [...]

Heading into this final stretch, the path forward remains unclear. “It has been frustrating,” said Tyson Slocum of Public Citizen, “when programs and policies that have broad bipartisan support get bogged down in this stuff.”

And how’s this for glowing optimism:

“If I were to put Vegas odds on it, I would bet in favor of some deal, probably along the lines of a short-term extension, getting hammered through,” Slocum said.

Renewable Tax Credits Not Renewed…Again

From E&E (sub. req’d):

A Senate bill to extend renewable energy tax credits stalled again today when Republicans blocked the measure on the floor, arguing for a debate instead on the expansion of offshore oil-and-gas leasing.

A Democratic motion to bring up the so-called extenders bill failed, 51-43 — falling short of the 60 needed to launch formal debate. In addition to extending expiring credits for wind and solar projects, energy provisions in the bill include credits for plug-in hybrid cars, cellulosic ethanol production and coal projects that control greenhouse gases.

The Governors Get It

All 50 governors–Democrats, Republicans, Conservatives and Liberals–signed on to a letter to Congress in support of a five year extension of the renewable energy tax credits.

Here’s an excerpt from the letter, via Gristmill:

Renewable energy plays an important role in our nation’s energy security, and governors have pioneered a wide array of innovative energy policies in their states. To supplement state efforts, governors support the development of federal tax incentives, including clean renewable energy bonds, to promote clean, secure, and affordable energy to fuel America’s future.

We also encourage Congress to continue to develop incentives for programs that help families and businesses use energy-efficient building techniques, materials, and equipment readily available in today’s market. Extending incentives for energy efficiency and conservation will slow the growth of future energy needs, minimize ratepayer costs, and lessen potential environmental impacts.

My guess is that Congress will pass an extension before the year is up, although Congress should act sooner rather than later so that clean tech companies can map out their future plans more accurately.

Senate Passes Energy Tax Credit Extensions (Without Funding Offsets)

Breaking news! (Actually, I should have posted on this a few days ago, but let’s pretend I’m not posting this a few days late.) Reuters reports:

The U.S. Senate voted…to include in a housing rescue bill an extension of tax incentives that encourage renewable energy production and investments to reduce energy use.

The Ensign-Cantwell amendment passed overwhelmingly 88-8, mainly because it didn’t specify where the money for the tax credit extensions will come from. Earth2Tech has more:

Now, before you get too drunk off of the legislative lager, this doesn’t mean the ITC and PTC have all green lights. The bill will now have to head back to the House where Democrats will likely, and rightfully, question where the money for these extensions is going to come from. [...]

So, while this is certainly not the final chapter in the ITC/PTC renewal saga, it does show that there is good will on both sides of the aisle for this issue. Now the two sides just need to figure out how to fund it.

Breakthrough on Renewable Energy Tax Credits?

CQ reports that the Senate may extend the renewable tax credits after all:

The Senate’s deadlock over tax breaks for renewable energy may be ending.

Sen. John Ensign, R-Nev., said negotiators have made progress, and he expects a “big announcement” Thursday.

Ensign and Sen. Maria Cantwell, D-Wash., have been working on a package of tax incentives, including extensions of credits for producing electricity from wind and sunlight.

Senate Finance Chairman Max Baucus, D-Mont., also sounded upbeat.

“There is a very good chance, compared to before we broke for the break, that we are going to get a significant extenders package paid for,” Baucus said. “We’re working with both sides to get that done.”

We don’t yet know for sure how–or even if–these extensions would be paid for. But the Las Vegas Sun thinks it has the scoop:

The $6 billion bill won’t be paid for, period.

Democrats have instituted pay-as-you-go rules to avoid running up the federal deficit with new programs. But supporters of the energy bill — who number 20 so far in the Senate — hope to skirt the rules that require spending be off-set with revenue by framing the bill as an economic stimulus package. They have a precedent: The rules were lifted earlier this year when Congress passed the $150 billion stimulus package that is sending $600 rebate checks to most Americans.

Here are the details of the Cantwell-Ensign bill, from Hill Heat:

• The renewable energy production tax credit (PTC) is extended one year to 2009 and modified to include tidal power
• The solar and fuel cell investment tax credit (ITC) is extended 8 years to 2016
• The residential energy-efficient property credit is extended one year to 2009, and the $2,000 cap is removed
• Clean Renewable Energy Bonds (CREBs) are extended one year to 2009, with an additional $400 million authorized
• The 10% ITC for energy-efficiency improvements to existing homes is extended one year to 2009
• The contractor tax credit for energy-efficient new homes is extended two years to 2010
• The energy-efficient commercial buildings deduction is extended one year to 2009 and increases the $1.80/sqft max to $2.25/sqft
• The energy-efficient appliance credit is extended to 2010

Note the long-term extension of the solar tax credit. That would make it easier for renewable energy companies to carry out plans for bigger and better solar energy arrays–such Solana’s proposed plant in Arizona.

NYT: ‘The Senate Shills for Big Oil’

The New York Times editorial page takes the U.S. Senate to task today for blocking renewable energy tax incentives from last year’s energy bill. But, as the editorial points out, the Senate “now has a chance to redeem itself” by passing the House renewable energy tax credit bill. Read the whole thing, it’s great.

The Times digs up a doozy of a quote from President Bush, who a few years ago argued against the same tax incentives he’s now defending:

If those arguments aren’t enough, we offer the Senate some words from President Bush. In a 2005 address to the American Society of Newspaper Editors, Mr. Bush spoke forcefully of the need for an energy strategy that looked to the long term and emphasized conservation and renewable fuels.

Of the oil and gas industry, he said pointedly: “I will tell you with $55 oil we don’t need incentives to the oil and gas companies to explore. There are plenty of incentives. What we need is to put a strategy in place that will help this country over time become less dependent.”

The question for Mr. Bush and the Senate is clear: If that was true at $55 a barrel, why isn’t it even more valid and urgent at $100 a barrel?

That’s a good question that senators will have to answer soon.