Construction

As part of the US’s emergency $700 billion rescue package for the economy, President George W. Bush has extended precious tax credits for energy efficiency and renewables.

The legislation, passed by the House of Representatives late last week, extends energy efficiency tax breaks for commercial buildings for a further five years and adds similar benefits for home improvements.

Builders of energy efficient homes will also get tax credits until the end of 2009, while manufacturers of energy efficient appliances will see their tax credits extended until the end of 2010.

The much needed production tax credit (PTC) for wind energy is also extended under the new bill until the end of 2009. Other renewable technologies, including solar, biomass, rubbish-to-energy, geothermal and hydro electricity generation schemes get a two-year extension to 2010.

And the bill creates some new PTCs as well. Marine and hydrokinetic or advanced water power systems with capacities over 150 kW will now benefit from a PTC. Some combined heat and power systems and geothermal heat pumps will also now receive a 10% tax credit.

Microgeneration also got a boost from the new legislation. Residential and commercial solar installations will be eligible for a 30% tax credit until 2016, while small wind (less than 100 kW) got a similar deal. Fuel cells and microturbines also got an eight-year extension to their tax credits.

“By passing this bill, Congress has finally given the solar energy industry ‘policy certainty’ that will attract investment, expand manufacturing and lower the cost of solar energy to consumers,” commented Roger Efird, chair of the Solar Energy Industries Association (SEIA) and president of Suntech America.

Meanwhile, plug-in hybrid vehicles will net a $7500 tax credit when they go on sale in 2010 and there are new tax breaks for alternative refuelling stations. The PTC for biodiesel and other biomass-derived diesels are extended until the end of 2009.

“These new incentives should help these emerging industries to grow,” said Steven Nadel, Executive Director of the American Council for an Energy-Efficient Economy. Adding, however, that many of the tax incentives will only last for a year and will have to be revisited by Congress in the near future.

For further information:
www.seia.org/
www.aceee.org/press/0810legislation.htm
www.whitehouse.gov/news/releases/2008/10/20081003-17.html