The bottom line is that short-term extensions of the renewable energy tax credit creates a boom and bust cycle of short-term planning, painful layoffs and higher than necessary project costs. Financial lenders stop providing the capital needed for wind energy projects about 4 to 6 months before the credit is scheduled to expire because of the uncertainty surrounding the future availability of the credit. This uncertainty inevitably leads to a rush to complete projects at higher costs, and those costs are passed along to consumers.The bill also proposes to expand the current PTC program to allow non-profit cooperative and municipal utilities to take advantage of the tax-credit. Non-profit Cooperatives and municipalities are currently only eligible for the Renewable Energy Production Incentive (REPI) program, which historically has been dramatically under-funded.
S.542 has been referred to the Senate Finance Committee.
For more on current federal renewable energy legislation, check out our previous post on the topic.