The U.S. House of Representatives last night passed President Obama’s $819 billion stimulus bill that looks set to benefit the renewable energy industries. The bill features a provision that will allow projects to convert investment tax credits into direct payments to investors in those projects for the next two years.
However, there is some doubt amid this cause for jubilance, as it seems there is a second version of the same bill being passed around the U.S. Senate that omits this provision. While it is claimed that the two versions of the bill will be merged at some point in the future, the Senate will vote on its version of the bill next week and it is a cause for concern for the solar industry that the provision might eventually be phased out of the merged bill.
The provision also sidesteps another problem facing the industry. Investors in the renewable energy sector do not have taxable income to offset, were the bill to continue with the tax credit system. Instead, this new system will see the payment of grants instead of the credits system, with up to 30% of the cost of the planned renewable energy project being paid by the U.S. Department of Energy. It is hoped that this provision will be included in the consolidated version of the stimulus bill to guarantee developments and investments for the renewable energy industry.
Of interest to those in the renewables industry is a 30% manufacturing tax credit that will be made available to companies that manufacture equipment such as solar panels and wind turbines, featured in the Senate’s version of the bill. While this tax credit features a cap at $2 billion, it will make investments in U.S.-based manufacturing facilities very attractive.