Congress is putting the short-term future of renewable energy companies in jeopardy as the presidential candidates and most lawmakers hail windmills, solar panels and biofuels as long-term solutions to high gas prices and global warming.
Some $500 million in investment and production tax credits will expire Dec. 31 unless Congress renews them. Without that help, solar and wind power companies say they will reverse planned expansions and, in many cases, cut payrolls and capital investment.
The Solar Energy Industries Association says some 20 utility-scale solar power plants, many in California and together capable of producing power for a million homes, are at risk because of the uncertainty in Congress.
Proponents of wind power, an industry that relies on skittish investors, are in a similar predicament. Greg Wetstone of the American Wind Energy Association says his group is predicting a loss of 76,000 jobs and $11.4 billion in investment if Congress allows its production tax credit to expire.
Sign Up and Save
Get six months of free digital access to The Charlotte Observer
“Investors like to know what tax policies apply when they are putting millions of dollars down on a project. There's a pretty clear history that these projects are less likely to go forward without a credit,” he said.
Congress let the credit expire in 2000, 2002 and 2004. In those three years, wind capacity installation dropped 93 percent, 73 percent and 77 percent, respectively, from the previous year.
The credits are expected to total $334 million, according to congressional estimates.
“These companies are shutting down projects, firing people and it's Congress' fault,” said Sen. Jeff Bingaman, D-N.M., chairman of the Senate Energy and Natural Resources Committee.
Senate Republicans have blocked consideration of extension plans by Senate Finance Committee Chairman Max Baucus, D-Mont. Because tax credits are set to expire at a certain date by law, they do not count as revenue losses after that date even though most people assume Congress eventually will act to extend them. The Bush tax cuts of 2001 and 2003 are the biggest extenders of all in this respect. Trillions of dollars will be added to the federal debt if Congress chooses to make them permanent after they are set to expire in 2010.