'Last Best Chance' for Renewable Energy Tax Credits?

[jpak]

http://www.renewableenergyworld.com/rea/news/story?id=52559

With Wednesday's passage of a House bill that could extend the production and investment tax credits, many in the industry are cautiously hoping for an end to a political standoff that has threatened to cripple the nation's renewable energy industry.

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Called the Renewable Energy and Job Creation Act of 2008, the bill extends the production tax credit (PTC) for one year, extends the investment tax credit (ITC) for six years, and authorizes $2 billion for new clean renewable energy bonds to finance renewable energy facilities.

Now the tax extension package moves onto the Senate where it is expected to face an uphill battle because of disagreements over how to pay for the credits — an issue that has hindered the process from the start. According to industry lobbyists, the House Ways and Means Committee has been working closely with the Senate Finance Committee to figure out a funding source that is acceptable to both chambers of Congress; however, it appears that any "pay-fors" demanded by Democrats are not agreeable to most Republicans.

The latest US $20 billion tax package for renewables is offset by closing a tax loophole that allows employees of specific offshore corporations (i.e. hedge fund managers) to avoid taxes on their compensation. While this funding source has been agreed upon by the respective House and Senate financial committees, it most likely will not have support from the broader Senate. This has industry representatives in Washington frustrated about the possibility that the tax credits will yet again be squashed because of funding disagreements.

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