The Senate Finance Committee proposed on Wednesday an overhaul of clean energy tax credits, many of them set to expire at the end of the year. The draft, presented by Committee Chair Sen. Max Baucus (D-Mont.), calls for simplifying and extending the messy patchwork of incentives while cutting their $150 billion price tag over the next decade by more than half. The plan would create two broader clean-electricity and fuel incentives based on greenhouse gas levels, as determined by the EPA.
“It is time to bring our energy tax policy into the 21st century,” Baucus said in a statement. “Our current set of energy tax incentives is overly complex and picks winners and losers with no clear policy rationale. We need a system of energy incentives that is more predictable, rational and technology-neutral to increase our energy security and ensure a clean and healthy environment.”
The proposal is drawing a split reaction from the nation’s two largest renewable energy sectors, Earth Techling reports:
The American Wind Energy Association commended Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, “for putting forward a sound policy option to provide domestic energy producers with stability for the years to come.” But the Solar Energy Industries Association said it was “very concerned” with aspects of the plan that Baucus floated.
A look at the plan reveals the reasoning behind the split response: While wind would retain the production tax credit it sees as vital to its health, solar would see its investment tax credit shrink and also lose accelerated depreciation provisions.
Other losers include individuals and businesses that previously enjoyed tax breaks for making buildings, homes and appliances more energy efficient. Buyers of plug-in electric vehicles and fuel cell vehicles would lose their incentives as well.
Whether the plan will pass the gauntlet in Congress is another matter altogether.
“His proposal is unlikely to go anywhere anytime soon,” Politico wrote. “The push for tax reform has stalled in Congress, and his latest proposal would gut scores of incentives with broad bipartisan support among his colleagues. But it’s intended to jog the tax-reform debate.”
Photo: Jan. 19, 2010: Clouds turn orange and purple as the sun sets behind the Happy Jack Wind Farm east of Cheyenne, Wyoming. (AP)