[The Vector] Expected Impact of Energy Provision Extensions: What Next? (Continued)

(Continued from earlier…)

To date, 1,179 solar projects with total investments of over $1.3 billion in 42 states have been built with support from this program. In 2009, the U.S. installed about 435 megawatts of solar. That doubled to about 1,000 megawatts in 2010 and many forecasts point to 2,000 megawatts installed in 2011 with the bill extension.

Resch said that 1603 is “simply the most important policy for continuing renewable energy growth in the U.S.”  Renewable energy industry insiders consider 1603 the most power force behind growth in 2010 — it subsidizes about 30% of the new facility costs for renewable energy projects.

So what are some of these 1603 tax extension provisions?

A $1 per gallon production tax credit for biodiesel; a 50 cent per gallon alternative fuel tax credit; credits for manufacturers of energy efficient appliances such as washing machines, refrigerators and dishwashers; credits for manufacturers of energy efficient residential homes; cash instead of tax credits to energy producers; one year extension for the “start of construction” deadline for wind and solar projects.

I am not a fan of ethanol and have written about this a number of times. Sen. Dianne Feinstein (D-Calif.) doesn’t seem to be, either, though for other reasons. She said, “The ethanol industry is the only one to ever receive the triple crown of government intervention. Ethanol use is mandated by law, its users receive federal subsidizes and domestic production is protected by tariffs. That policy is not sustainable.” She is pushing to reduce ethanol credits.

What else was included in the bill as regards the energy sector? Extension of the “placed in service” deadline for qualifying refined coal facilities; extension of the special rule for marginal oil & gas wells as regards depletion; and extension of the present law deferral of gain on sales of transmission property by vertically integrated electric utilities to FERC-approved independent transmission companies.

Many other non-energy items were included, and a mere summary of the extensions runs twelve pages and boggles the brain. As most of us know, the provisions include temporary extension of tax brackets, unemployment insurance, capital gains & dividend rates. It also includes:
Repeal of the itemized deduction limitation; extension of the child tax credit, marriage penalty relief, employer credit for child care and expanded dependent care credit; extension of expanded Coverdell accounts, expanded student loan interest deduction, rebate exception for school construction bonds, and extended tax credits for cost of tuition; extended relief on Alaska settlement funds; two year AMT patch; temporary reduction in employee-paid payroll taxes; extension of certain expenses for elementary and secondary grade school teachers; deduction of state and local general sales taxes; extension of increases in monthly exclusion for employer-provided transit benefits; bonus depreciation on mine safety equipment; extension of railroad track maintenance, mine rescue team training, wage credits for military reservists, cost recovery of motorsports complexes and Indian employment credits; credits for investment in low-income communities; enhanced charitable deductions for food, books and computers; extension of expensing rules for US film and tv productions; tax incentives in District of Columbia enterprise zone; extension of American Samoa economic development; active financing exceptions; extension of certain tax treatments of regulated investment companies; extension of tax incentives for the New York Liberty zone, for rehabilitation of historic structures in the Gulf Opportunity zone as well as temporary depreiciation and tax-exempt bonds in the same zone; extension of R&D credit.   

We Wonder Why Energy Gets Buried

I have summarized some of the credits above to make the point. Energy is bundled up and mixed in with many issues. Perhaps clean energy won a small battle with the tax extension, but clean energy is losing the war for better advancement overall because of short-term commitment.

We need clear cut planning, vision and especially leadership to get us to a secure energy future.