Expiring Tax Breaks Threaten Wind, Solar Power Industries

WASHINGTON – Congress is putting the short-term future of renewable energy companies in jeopardy even as the presidential candidates and most lawmakers hail windmills, solar panels and biofuels as long-term solutions to high gasoline prices and global warming.

About $500 million in investment and production tax credits will expire Dec. 31 unless Congress renews them. Without that help, solar and wind power companies say they will reverse planned expansions and cut payrolls and capital investment.

Schott Solar spokesman Brian Lynch said the investment tax credit is what makes solar power cost-competitive. Without it, expansion plans must be reconsidered.

The Solar Energy Industries Association says about 20 utility- scale solar power plants, capable of producing power for a million homes, are at risk because of the uncertainty in Congress.

Proponents of wind power are in a similar predicament. Greg Wetstone of the American Wind Energy Association says his group is predicting a loss of 76,000 jobs and $11.4 billion in investment if Congress allows its production tax credit to expire.

Navigant Consulting estimated that investments in wind and solar power in 2009 would amount to $26.6 billion with the credits; that would fall to $7 billion without them. The credits are expected to total $334 million, according to congressional estimates.

Investment tax credits, available to homeowners and businesses that invest in solar power equipment, and the production tax credit, based on kilowatt hours of energy produced by renewables, are two of dozens of temporary tax breaks that die out after a year or two if Congress does not revive them.

This year Congress is considering tax-extenders worth more than $50 billion over the next decade. The production tax credit would cost $7 billion and two solar investment credits would cost $2.7 billion over 10 years.

The biggest concern for high-tech companies and manufacturers is the research and development credit, which expired at the end of last year. One repercussion, said Monica McGuire, the executive secretary of the R&D Credit Coalition, is that more companies take their research dollars overseas.

Originally published by Associated Press.

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