Several tax incentives, including a 1.9 cent-per-kilowatt-hour credit, are set to expire at the end of 2008. Solar tax credits for business and residential investment also will expire then, as does the CREB program. As a result, there is significant discussion about how and when to extend those incentives.
Environmentalists, renewable energy advocates and a bipartisan group of Members want to extend the credits, to increase renewable energy investment. Although popular, under the pay-as-you-go system implemented by the new Democratic majority, these credits may be difficult to extend, due to budget constraints.
Senate Finance Committee Chairman Max Baucus (D-MT) said that, while he supports tax incentives for renewable energy, he has not made a decision on when to act on legislation. Baucus and Senate Majority leader Harry Reid (D-NV) both generally support the extensions but have given no indication as to when they expect to have a draft energy tax bill in place. Before this happens, the Senate Energy and Natural Resources Committee (ENR) will draft and introduce an energy policy bill. The bill is currently in the process of being developed but no set timeline has been established. . ENR Committee Chairman Bingaman would like an energy policy bill to focus on biofuels, energy and building efficiency and renewables and hopes to extend efficiency tax incentives beyond 2017.
House Ways and Means Committee Chairman Charlie Rangel (D-NY) said that he expects to have energy legislation through his committee by late spring. Also, Rep. Earl Pomeroy (D-ND) introduced a bill, which now has 70 co-sponsors, which would extend the production tax credit (PTC) to aid development of wind energy and other renewables, for five years.
One possible vehicle for tax extensions may be the farm bill, which is likely to include a large energy title that could provide incentives for alternative fuels and other sources. The House and Senate Committee are aleayd working on a draft bill to re-authorize a range of agriculture programs. Senate Finance Committee Ranking Member Charles Grassley (R-IA) said that extending the tax incentives in the farm bill has been discussed, including all of the incentives that will expire at the end of next year.