News

October 06, 2008

Alternative Power Figures Prominently In The US Bailout Rescue Package, Bringing Some Bloom To Gloomy Financial Markets

By Elena Clarici

Who would have expected that after nine failed attempts to pass the US renewables tax credit legislation through Congress that the bill would suddenly re-surface as a part of the US bailout rescue package? The legislation, known as the Energy Improvement and Extension Act of 2008, encompasses incentives worth in excess of US$18billion in the form of renewable energy Investment Tax Credits (ITC) aimed at homeowners and businesses. It also extends the Production Tax Credit (PTC) by an additional year, through 2009. The PTC is an income tax credit which is given for the production of electricity from qualified wind energy facilities and other sources of renewable energy. Its value is currently 2 cents per kWh of electricity produced. The bill also allows for new types of facilities to qualify for the credit, including new biomass facilities and those that generate electricity from marine renewables like waves and tides.

The ITC will extend a 30 per cent tax credit for businesses that build or invest in solar through to 2016. It will also eliminate the US$2,000 cap on tax credits for residents who install solar-electric systems. The bill provides US$1.25 billion in new tax credits for the creation of advanced coal electricity projects and US$250 million for certain coal gasification projects that demonstrate the greatest potential for carbon capture and sequestration technology.

The legislation is...