Chairman of the Senate Committee on Energy and Natural Resources Jeff Bingaman, D-N.M., is urging Congress to include a new incentive program for renewable energy in the economic recovery package. The plan would stimulate renewable energy production by offering an alternative to tax equity financing, while ensuring protection for taxpayers.
To help meet President Obama's goal of doubling renewable energy production in three years, Bingaman plans to advance a proposal to enable renewable energy producers to claim a 30% cash grant from the U.S. Treasury Department in lieu of the 30% investment tax credit. Under this plan, the Treasury secretary would award the grant only after determining that the producer has taken adequate actions to protect taxpayers.
Bingaman noted that domestic demand for solar, wind and other renewable resources has grown rapidly over the past few years, and faster growth is anticipated in the near future – especially with the expected enactment of a national renewable portfolio standard.
Bingaman contrasted his approach with a provision in the House stimulus bill, which would allow for similar grants, but would be administered through the Department of Energy and not require participating firms to make trade-offs to participate.
‘The House approach to addressing renewable energy financing is inadequate because it fails to protect the taxpayer and because it needlessly involves the Department of Energy,’ Bingaman says. ‘My proposal finds common ground by offering an alternative to financing through the tax equity markets in a manner that protects the taxpayer and doesn't create a refundable tax credit in disguise.’
Congress has generally not permitted corporate taxpayers to refund tax credits, Bingaman notes. His proposal is modeled on the Emergency Economic Stabilization Act, which created the Troubled Asset Relief Program.
SOURCE: U.S. Senate Committee on Energy and Natural Resources