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April 22, 2005 While few and far between, the Energy Bill, passed by the U.S. House has a few noteworthy renewable energy items. Ultimately, it's the Senate that will decide what the final bill looks like -- and that's expected to be a tough battle. Photo: aoc.gov |
We're in the same position as almost anyone hoping for
a tax credit. All the tax credits will have weak House versions and a stronger
Senate version. That's where the real battle's going to be."
- Colin Murchie, director of Government Affairs for the Solar Energy Industries
Association
Peterborough, New Hampshire [RenewableEnergyAccess.com] At a time of record high gas and energy prices, the U.S. House of Representatives passed a broad energy bill, an $8 billion dollar package of legislation aimed at increasing domestic supplies of energy. While the bill targets the majority of its tax cuts to the traditional energy industries -- a point not lost on Congressional Democrats who held little sway in crafting the package -- it does include some provisions to promote renewable energy.
The comprehensive legislation (H.R. 6) includes a measure called for by U.S.
Representative Charles F. Bass (R-NH), who serves on the House Energy and
Commerce Committee, that would enact a rebate program for residential and
business investments in renewable energy systems. It will cover up to 25
percent, or $3000, of the cost of a solar thermal, solar photovoltaic (PV),
small wind turbine, geothermal (geoexchange), small hydro, or biomass system
with a high enough level of thermal exchange, like a wood-pellet stove.
Rep. Bass himself recently upgraded to a pellet stove at his New Hampshire
residence in Peterborough, an experience that partly affected his support for
this legislation.
"By deferring some of the costs of installing these state-of-the-art
systems, we guarantee that more people will have access to more affordable,
environmentally sound, and domestically produced energy options," Rep. Bass
said.
The rebates suffer from a critical weakness, however. They are not crafted as a
secured tax credit but rather rely on funding to be appropriated by Congress
each year, an arguably daunting prospect in that fiscally-constrained
environment.
"As a tax credit, it's a step forward, but as a grant program, it would be
irrelevant," said Colin Murchie, director of Government Affairs for the
Solar Energy Industries Association (SEIA).
Many an admirable and well-intentioned bill has been passed by Congress yet
failed to fulfill on its promises due to a lack of guaranteed, and consistent,
funding.
Tad Furtado, legislative aide for Rep. Bass, acknowledged this challenge and
said they would work to have the bill's structure changed from a grant program
to a tax-based structure when the Senate takes up the comprehensive energy bill
later this summer.
"Our hope is that we will be successful in getting it covered as a tax
rebate system," Furtado said. "It's just a lot easier for a lot of
consumers."
Should the effort fail in the Senate, Furtado said Rep. Bass could exert
influence through his position on the House Energy and Commerce Committee to
secure funds for the bill.
Senate Now Decides the Final Energy Bill
The funding situation presented by the bill from Rep. Bass -- however it
resolves itself -- reflects a larger concern with the energy bill. The bill,
which the House passed on margins of 249 to 183, is merely a starting point. The
renewable energy rebate plan, along with every other item in the energy bill,
won't become law unless a number of steps occur: The Senate must pass their own
version, a final conference committee must then reconcile both the Senate and
House version and then its off to the President for a signature. This is the
fourth time in as many years that the House approved a similar version of the
energy bill, only to see it fail on the Senate side of Congress.
The Senate's version of the energy bill is still being finalized and is a
stronger package for renewable energy. Senator Lamar Alexander (R-TN) is
proposing a five-year 30 percent investment tax credit for both residential and
commercial solar PV and solar thermal projects. The bill would be capped at
$7500 for residential projects and unlimited for commercial-scale projects.
With items like Rep. Alexander's bill, the Senate version will likely be the
better bill for renewable energy. But it's also where the real fight takes place
on issues like allowing drilling in the Arctic National Wildlife Refuge (ANWR),
and liability protection for the manufacturers of MTBE, a known groundwater
pollutant afflicting many U.S. states. Both items were approved in the House
bill.
"The House version is cut way back, this will not ultimately be the final
tax package," Murchie said. "What we've seen on the house side is on
the lower end of what's realistic. We're in the same position as almost anyone
hoping for a tax credit. All the tax credits will have weak House versions and a
stronger Senate version. That's where the real battle's going to be."
In essence, the U.S. House passed a trimmed down bill and is leaving the Senate
to fight for the final outcome.
Traditional renewable energy advocates are not the only ones looking to see more
clean energy provisions in the Senate version than was included in the House
bill. The Bush Administration, which is regularly passed off by critics as being
too favorable to the traditional energy industries, indicated that there are not
enough renewable energy provisions in this recently passed house version.
The Bush Administration's official reaction to the House version of the energy
bill states the following:
"The Administration also is concerned about the significant direct and
potential cost of H.R. 6. The President's 2006 Budget contained tax incentives
totaling $6.7 billion over ten years, dedicated to alternative and renewable
fuels, conservation, energy efficiency, and emissions-free energy. The tax
incentives in H.R. 6 exceed the President's Budget and do not contain the
President's proposed tax credits for renewable power sources such as wind and
landfill gas, for businesses that invest in combined heat and power property, or
for hybrid and fuel-cell vehicles."
At a press conference held yesterday, White House Press Secretary Scott
McClellan went a step further, expressing concern over tax cuts directed to the
oil and gas industries which are thriving due to the high costs of gasoline and
energy.
"(The President) doesn't believe that with the price of oil around $50 a
barrel, that oil and gas companies need any incentives at this point,"
McClellan said. "Now, we do have tax incentives in our plan, and we believe
those ought to focus on renewable sources of energy and increasing energy
efficiency."
It's now up to the Senate to decide if items like the rebate bill secured by
Rep. Bass, or the strong tax-credits proposed by Rep. Alexander are included in
a final Senate version.
And even if the upcoming battle over drilling in ANWR and MTBE manufacturer
shield legislation doesn't keep the bill down like it has done in the past, the
two versions will still have to go on to a secretive, behind-closed-doors
finalization process.
"If it passes, it all disappears into conference. And it's all smoky rooms
after that," Murchie said.
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