Senate Finance Committee Chairman Wyden has officially begun consideration of legislation to reinstate a suite of tax credits that big polluters and their allies succeeded in getting Congress to let expire, including vital, commonsense policies that promote clean energy.
These tax credits grow the economy by cutting pollution and their absence in the committee’s initial bill draft belies the broad, bipartisan support renewable and energy efficiency continue to attract. As final legislation takes shape, Congress should remain clear just what is at stake: clean energy is central to meeting our obligation to defend the next generation from the dangerous pollution that threatens our climate, health, and economy. The nation’s tax code is an important tool and it should be used to promote progress, not turn back the clock on our children’s future.
Continued support of America’s critical renewable and energy efficient tax policies – and for a period longer than what unfortunately has been traditionally limited to a one-year extension-- also will provide the market signals and stability necessary for significant job creation and technological advances to further advance a clean energy future. It’s time to stop permanently subsidizing big polluters and instead double down on using our tax code to support clean energy.
Below is a list of the clean energy credits that Congress must ensure are included in any final package:
Support for Wind and other Renewable Energy:
The Renewable Electricity Production Tax Credit (PTC) offers a per-kilowatt-hour tax credit for electricity generated by qualified energy resources, including wind and geothermal. It has played a valuable role in advancing wind power and nurturing an industry that now provides jobs to more than 80,000 Americans. In 2012 alone, the tax credit helped the wind industry catalyze $25 billion in private investment in our economy. Over 70 percent of U.S. congressional districts have either a wind project or wind-related manufacturing facility, bringing local economic development to the region.
The Business Energy Investment Tax Credit (ITC) is a crucial strategy to launch the U.S. offshore wind industry, although it also applies to other resources like solar and geothermal. Considering that the Atlantic coast in particular has strong winds with an estimated potential of more than 1,300 gigawatts of energy generation, harnessing just 52 gigawatts offshore could power about 14 million U.S. homes and create more than $200 billion in new economic activity along the coast. Solar projects and other technologies supported through the ITC should also be eligible if they begin construction prior to the end of the credit period.
Key credits for Energy Efficiency, our cleanest, cheapest energy resource, should be refined and extended:
The Deduction for Commercial Buildings (179D) allows private building owners and public building designers who cut energy use by 50 percent, compared with what would be consumed if the building were constructed under the 2001 building code, to take a tax deduction of up to $1.80 per square foot. The savings are accomplished through changes in the lighting, heating, cooling, and ventilation systems, or in the building envelope – insulation, external windows and doors and/or roofing material. With more than 4.8 million commercial and other nonresidential buildings in the United States, the energy-saving potential is huge.
The Credit for the Construction of Energy Efficient Homes (45L) provides a $2,000 tax credit to builders who achieve a 50 percent reduction in heating and cooling energy use compared with a home built to the 2006 code. Studies since the 1980s have shown energy efficiency can increase a home’s value by roughly 9 percent.
The Credit for Residential Energy Efficiency Improvements (25C) offers homeowners a tax credit for 10 percent of the cost of energy efficient building envelope improvements and replacement equipment that meet certain criteria, with a $500 maximum over the life of the credit.
Credit for the Manufacture of Energy Efficient Appliances (45M) offers a per-unit credit to builders of high-efficiency dishwashers, refrigerators, and clothes washers, according to energy savings. Enacted with industry support, this incentive boosts U.S. manufacturing as well as energy efficiency. The Association of Home Appliance Manufacturers says 40,000 jobs are affected by this incentive: at least 17,000 direct manufacturing jobs and 23,000 support jobs.
Incentives to help grow the alternative-fuels sector:
The Second-Generation Biofuel Producer Credit (Section 40) provides a $1.01 tax credit per gallon of cellulosic or algal biofuel production. Although it could benefit from several changes, the credit is the bedrock tax incentive for potentially sustainable alternatives to petroleum.
The Alternative Fuel Infrastructure Tax Credit (Section 30C) helps individuals and businesses invest in recharging infrastructure that supports electric vehicles. Ideally, a multi-year extension would provide the necessary certainty to reinforce private investment across the electric and fuel cell vehicle markets.
The Incentive for Fuel Cell Vehicles (26 USC 30B), which expires this year,provides a substantial tax credit to defray the cost of new fuel cell vehicles. Because it is performance-based, it provides a greater incentive for light duty fuel cell vehicles that achieve greater mileage performance. These vehicles represent an opportunity to shift the transportation sector from petroleum to hydrogen.
Commuter Transit and Parking Benefits
Monthly commuting costs are reduced by excluding them from federal taxation. Drivers benefit from this provision via cheaper parking at their sites of employment. Providing this benefit for transit and vanpool users as well puts them on par with drivers and delivers an effective incentive for choosing these cleaner and more energy-efficient means of transportation, benefiting communities and the environment as well as workers.
In short, we need every wind turbine, solar panel, electric vehicle, and energy-efficient heater if we’re going to cut the carbon pollution driving climate change and to move America closer to a more stable and prosperous future. Both chambers of Congress should follow Chairman Wyden's lead and waste no time reinstating the full suite of clean energy credits.
This article was originally published on NRDC and was republished with permission.
Lead image: US Capitol via Shutterstock
Sent from my BlackBerry 10 smartphone.
--
Monty Bannerman
ArcStar Energy
646.402.5076
www.arcstarenergy.com
No comments:
Post a Comment