U.S. Senate Approves Extension of Renewable Energy Credits

WASHINGTON, D.C. — The U.S. Senate overwhelmingly voted to extend renewable energy tax credits last week, a move that if made a law would continue credits for wind, solar, biomass and related projects for another year.

The tax credits, which expire at the end of this year, were added to a housing bill by an 88-8 vote. The Housing Stimulus Bill passed with an 84-12 vote. In its current form, the extension would allow companies to receive tax credits for starting new projects that produce electricity from renewables through the end of 2009.

The Production Tax Credit provides 2 cents for every kilowatt hour of electricity generated from renewables, according to United Press International. As long as companies begin operating their projects before the end of next year, they can claim the credit for the next decade. If approved, the tax credits are expected to cost more than $6 billion over 10 years.

Extensions would also be given to other tax credits for making energy-efficient appliances, building energy-efficient facilities and residential purchases of renewable energy systems. Through the credits, homeowners and businesses could avoid paying 30 percent of the cost of installing solar of fuel cell systems.

The bill goes to the House of Representatives next. The House has approved similar legislation that would extend the tax credits for more than a year, according to Reuters, and would cover the cost by taking away credits from oil and gas companies. The Senate bill does not address how the government would cover the credits.