House Approves Bill to Extend Tax Credits

The U.S. House of Representatives recently approved a bill that extends tax credits for renewable energy set to expire at the end of 2008. The bill, which passed 236-182, would give $8 billion in tax breaks through 2011 to companies that produce new electricity from natural sources, such as wind, geothermal, biomass, and hydropower. A 30% credit for investments in solar products and fuel cell technology would be effective through 2016.

The bill extends a credit of 1.9 cents per kilowatt hour of electricity produced through renewable sources, which could add up to thousands of dollars for $1 million or more to projects of varying sizes. The bill also contained financial incentives for energy efficiency, offering tax credits of $4,000 to $6,000 for families to buy plug-in hybrid cars and a break for the purchase of power-saving home appliances.

Earlier bills were voted down in the Senate. Supporters of the House bill argue the tax credits are necessary to provide long-term stability for renewable energy ventures.