Bail-out bill raises US renewable energy hopes

http://www.environmental-finance.com
New York, 2 October:

Renewable energy groups are increasingly optimistic that Congress will extend production and investment tax credits, after the US Senate voted in favour of a revised economic bailout plan to which the provisions had been attached.

Following Senate approval, the House of Representatives must vote on the combined package and some members still oppose extending tax credits without finding alternate revenue sources. But major stock market declines this week could rally House support for the bill – which it rejected on Monday – during the expected debate and vote Friday.

"House members are hearing from constituents that it should pass," said Solar Energy Industries Association president Rhone Resch. "That's encouraging and it's a big difference from what they were hearing on Monday." Since the vote on Monday, the Senate modified the bill to include provisions such as an expansion of the federal guarantee on bank deposits up to $250,000 in hope of garnering more support in the House.

A major lobbying effort by renewable energy groups has gained the support of a few more Democrats and about 20 Republicans, Resch said. "At this point, we're very optimistic that this will get passed," he said. "I think we are very close." In a research note, New York-based Collins Stewart analyst Dan Ries described the developments in the Senate as a "ray of hope" and gave the legislation a 50-50 chance of passing. If the House decides not to amend the Senate bill, that probability rises to 75%, but it declines if the House makes any changes.

Renewable energy groups said the latest bill's provisions are identical to those overwhelmingly passed by the Senate about two weeks ago. The bill would extend the PTC until the end of 2009 for wind and up to 2010 for other renewable energy sources, as well as extend credits for biodiesel production. The 30% investment tax credit would be extended for solar energy and some fuel-cells through 2016.

"Our members are very pleased by the Senate's overwhelming vote of support for the renewable energy tax credits," Randall Swisher, executive director of the American Wind Energy Association, said in a statement. "We look forward to favourable consideration in the House of Representatives."