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December 20, 2010

Clean energy tax credits extended another year

The extended tax credits will prove a great present for thousands of workers in the renewable energy industry

President Obama signed legislation on Friday extending key tax credits supporting renewable energy projects and biofuel use.

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 contained an extension of the Section 1603 renewable production credit.

The credit was brought in by the 2009 Recovery Act, supporting more than 4,000 clean energy projects, and now gains a one-year extension.

Denise Bode, CEO of the American Wind Energy Association, which has been lobbying for the extension, said the success of the bill would be a “great holiday present” for the 85,000 workers in the US wind energy industry.

Ms Bode said: ”Orders will be on the rise for new wind power, and investors will put more capital into the U.S. economy because of what happened in Congress.”

Biofuels

Other key stimulus measures extended for another year by the President’s signature on Friday included the 45 cent per gallon blenders’ tax credit for ethanol, the 54 cent per gallon ethanol import tariff, the dollar-per-gallon tax credit for biodiesel and diesel created from biomass and the 10 cent per gallon tax credit for small agri-biodiesel producers.

Renewable Fuels Association President and CEO Bob Dinneen said the extension of the biofuels credits for a year would allow time for debate on longer-term incentives for renewable fuels.

He said: “Now is the time to put all chips on the table and have an honest debate about the merits of all energy incentives. In such a discussion, ethanol’s benefits would be clear.”

The 30% investment tax credit for alternative vehicle refueling infrastructure was also extended through 2011 by the bill.

Efficiency

Energy efficiency support measures were also extended by the bill after negotiating its way through the Senate and the House last week before being signed into law.

Builders of energy-efficient new homes can continue claiming up to $2,000 through the extended Section 45L tax credit, while the extension fo the Section 45M tax credit means continued support for energy-efficient appliances produced in the US.

The Section 25C credit was also extended through 2011, helping homeowners lower their energy bills with energy-efficient retrofits.

The credit allows taxpayers to claim up to $500 for improvements that make their homes more energy efficient like installing better-insulated windows and doors.