Democrats in the House are pushing for tax incentives for renewable energy to be included in the pending Congressional energy bill, even though the funding source they suggest is almost certain to draw a presidential veto.
To pay for incentives that would spur production of renewable energy from solar, wind, geothermal and other clean sources, Democrats are proposing to repeal about $21 billion in tax subsidies for oil and gas companies.
A letter sent to Democrats Tuesday by House leadership said negotiators are working to include the incentive measures passed last summer by the House in the new energy bill, which is expected to reach a vote in the House and Senate later this week.
According to Reuters, the letter says the bill “strengthens and extends existing renewable energy tax credits, including solar, wind, biomass, geothermal, hydro, landfill gas and trash combustion, while creating new incentives for the use and production of renewable energy.”
After reaching an agreement late last week to set vehicle fuel efficiency standards at 35 miles per gallon by 2020, it was unclear whether or not tax incentives for renewables would make the final bill.
Reportedly, the new bill would provide a 30% tax investment credit for installing solar arrays and a 1.8 cent-per-kilowatt-hour producer tax credit for companies producing renewable energy devices.
The bill would essentially transfer the preferred status currently given to oil and gas companies to clean energy companies. If the new bill reflects the bill passed last summer by the House, it would repeal reduced tax rates for major oil companies, lower foreign income tax deductions for companies that produce oil and natural gas overseas and decrease a tax break for companies to write off exploration expenses.
President Bush has threatened to veto any legislation that harms the oil and gas industry.
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