Wind, solar tax credits to expire
Green Energy Advocates urge sustained support through inclusion in stimulus package.
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With such growth in view, Schott AG of Mainz, Germany, last week announced plans to spend $100 million to build a new solar-part production factory near Albuquerque, N.M. It will initially employ 350 workers.Skip to next paragraph
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If the US market expands, the new Schott factory could expand to employ as many as 1,500 people. But if tax incentives aren't extended for several more years, the number of jobs would probably be far smaller, company officials say.
"The tax credits definitely set a positive environment for manufacturers like us to make long-term investments," says Mark Finocchario, president of Schott Solar, the US subsidiary headquartered in Roseville, Calif.
A one-year extension would help, he says. But it's the proposal for an eight-year extension that would be a long-term stimulus for jobs and investment.
The production tax credit, or PTC, now pays utilities about 2 cents for every kilowatt of wind power they produce over the first 10 years of a project's operation. Congress's Joint Committee on Taxation estimated the cost to taxpayers at less than $1 billion a year, AWEA officials say.
The solar investment tax credit, or ITC, if extended for eight years would raise a cap on the tax credit for residential installations from $2,000 to $4,000, and would allow utilities to tap the credit, too. Total cost: about $800 million.
Together, today's tax breaks for wind and solar cost taxpayers a little more than $1 billion annually.
Where to get the money to pay for the renewed tax credits for solar and wind power has been difficult. Efforts to wrap them into the new energy law foundered last month, in the face of opposition from the White House and GOP senators.
In a press conference expected Tuesday, environmental groups will push for the credits to be included in the new stimulus package. If that fails, hope remains that the farm bill or some other bill may rescue wind and solar before the year ends.
"This is good public policy that will produce jobs and help the economy," says Randall Swisher, AWEA executive director. "The question remains how Congress will get this done, but I think they will. I hope so."