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Congress Should Do More to Insure Investment Stability in the Renewable Sector

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The Senate Tuesday night finally approved a package of tax credit extensions, including many aimed at benefiting renewable energy, and has sent the measure to President Obama, who is expected to sign it into law. But the 25x’25 Alliance has joined those in the renewable energy sector who say the package, which only extends the credits through the end of this year, falls far short in insuring investment stability in the development of clean energy technologies.

Most of the tax credits to be extended under the measure expired at the end of 2013. Benefits that would now be retroactive to Jan. 1 of this year and carry until Dec. 31 include a wind energy production tax credit (PTC) that offers a 10-year credit of 2.3 cents per kilowatt-hour for the production of electricity from any wind facility that began construction before the end of this year. Other credits in the measure approved Tuesday include a cellulosic biofuel producer tax credit of $1.01 per gallon and a $1.00-per-gallon tax credit for diesel fuel created from biomass.

While the measure makes the credits retroactive to Jan.1, 2014, the short-term nature of the extension reflects the “stop-and-go” process to which Congress has subjected renewable energy policy over the past decade. Lawmakers have continually allowed the credits to expire after a short time, only to revive them later, destabilizing the environment for investors.

Wind industry leaders say the lack of a credit through most of 2014 slowed new facility development because of a chilling effect on investment. It should be noted that a third quarter report shows the solar energy industry continuing to grow at a rapid pace, due in no small part, industry officials say, to a 30-percent investment tax credit that was adopted in 2008 and will not expire until the end of 2016.

The 25x’25 Alliance is encouraged by congressional support of tax policies that benefit the renewable energy sector. But we encourage the new, 114th Congress set to convene in January to roll up its sleeves and go about constructing a long-term policy platform that would include funding mechanisms, tax breaks and production requirements for all forms of clean, renewable energy. A far-reaching, comprehensive renewable energy plan would significantly boost our economy, enhance our energy security and improve our environment.

Source: 25 X ’25