A group of 42 senators recently sent a letter to President Bush asking him to include in his fiscal 2008 budget an extension of the production tax credit (PTC) for an additional five years. President Bush approved the Tax Relief and Health Care Act of 2006, extending the PTC until Dec. 31, 2008.
To qualify for the tax credits, generating facilities have to be placed in service by the end of 2008. According to the senators, these incentives will not stimulate much new activity over the next two years because, unless a project is already well along, it will not be completed in time to benefit from the PTC. The senators say a five-year extension would create a time scale that matches the requirements of putting electric generation projects into operation.
‘A long-term credit of five years will give businesses the stability necessary to plan and finance renewable energy projects,’ the letter states.
If the tax credit remains in place until 2013, the group argues that it would likely lead to a surge in new construction. This would further help both the environment and the economy by creating more jobs.