Senate Approves Renewable Credits

Canwell/Ensign Amendment Added to Foreclosure Bill

Washington, D.C. April 10, 2008 The Senate approved the hotly debated measure to offer homeowners protection from foreclosure and incentives for the purchase of foreclosed properties. But at the last minute the Senate also included a measure to extend tax credits for solar and windpower, efforts which had failed on their own in three earlier Senate attempts.

The Senate passed an amendment by Senators Maria Cantwell (D-WA) and John Ensign (R-NV) called The Clean Energy Tax Stimulus Act of 2008, as part of The Foreclosure Prevention Act of 2008. According to Senator Cantwell's office, it provides the continuation of clean energy production incentives and incentives to improve energy efficiency that will create hundreds of thousands of jobs, save people and businesses money, and over time reduce energy costs over time.

“The renewable and efficiency industries have been soaring, creating thousands of jobs and diversifying our energy supply,” said Cantwell. “Newspaper headlines across the country have pointed to our country’s rising unemployment and declines in the manufacturing and construction sectors. At a time when people are uncertain about our economy’s future, we rose to the challenge and came to agree that losing valuable investment dollars and hundreds of thousands of jobs is not the answer. One thing we can do to help Americans avoid foreclosure on their homes is help them keep their jobs. By extending these tax incentives, we are not only providing certainty to these industries, infusing money into our economy, but creating high-paying, long-term jobs to help Americans get through these tough economic times.”

In real terms, consumers could save up to $500 on their taxes if they install energy efficient products in their homes that can also help them reduce their heating and cooling costs by 20 percent. In addition, passage of this amendment will support the deployment of enough solar energy in the next two to three years to power 1.1 millions homes. This amendment will encourage enough investment in renewable technologies over the next two years that can supply enough power to satisfy the needs of 35 cities the size of Seattle, Washington.

This amendment extends critical tax incentives such as, the production tax credit for electricity produced from renewable sources like wind, biomass, hydropower, and geothermal; and the 30 percent investment credit for businesses that install solar or fuel cell equipment. In addition, it extends a set of effective energy efficiency programs that give homeowners tax credits for installing energy efficient furnaces, windows and insulation to make their homes more efficient; that enable builders a tax deduction for going the extra mile and building more energy efficient new homes; that help businesses make energy efficient improvements to commercial buildings; and that encourage appliance manufacturers to produce the next generation of energy saving appliances.

Earlier this year, Cantwell spearheaded efforts to include the energy tax incentives in the economic stimulus package. While the incentives were included in the Finance Committee package, it fell one vote short of passage in the final economic stimulus bill.

But the renewable credits still face two major obstacles before becoming law. The Foreclosure Prevention Act is being criticized by the White House for offering too much to help businesses and not enough to help homeowners. The White House has also opposed any extension of renewable credits financed by ending tax credits for oil companies.

The measure also faces an uncertain future when it gets to the House, which has expressed its own suggestions for housing help. And while the House has already approved energy tax credit extension, it's not clear that it will approve them once again as part of a housing bill.