As reported In Bloomberg.com

By Daniel Whitten

Oct. 1 (Bloomberg) — U.S. tax legislation valued at more than $100 billion, including a host of alternative energy credits, gained new hope after Senate leaders late yesterday announced plans to tie it to a $700 billion financial rescue bill.

The tax plan will extend roughly $17 billion in tax breaks for solar wind and other renewable energy sources. It includes $42 billion in incentives for businesses and individuals for two years, including an $8.6 billion annual research and development benefit, and it would spare 24 million households from a $61.8 billion alternative-minimum tax due to take effect this year.

Senate Democratic Leader Harry Reid, of Nevada and his Republican counterpart Mitch McConnell, of Kentucky, agreed in principle on a bailout plan that they hope will draw the support of the House and Senate. It will now include tax measures, the energy proposals among them, that have been the subject of an impasse between the two chambers. The Senate has scheduled a vote on the bailout legislation tonight.

“We are fired up that Senator Reid and Senator McConnell have brought the extenders into play by attaching it to the financial rescue plan,” said Rhone Resch, president of the Solar Energy Industries Association in Washington. “The American public has engaged in a debate about the need to pass legislation that stabilizes our economy.”

The Senate is attaching unrelated tax legislation that it passed and that was opposed by some in the House of Representatives to the bailout bill. It is likely the last chance to get the tax measures passed and sent to President George W. Bush before next month’s election.

Risk to Legislation

The risk is that the bailout legislation may be jeopardized by contested tax legislation. The Senate leaders are calculating that the House will heed President Bush’s call to pass the rescue measures, ensuring the passage of the tax laws at the same time.

House Majority Leader Steny Hoyer and fiscal conservative Democrats, known as Blue Dogs, rejected the Senate tax plan because it wasn’t fully paid for. Hoyer and the Blue Dogs, about 24 of whom supported the bailout in a failed House vote Sept. 29, may have to decide whether to reject the new rescue plan because of their opposition to the Senate tax bill.

“I am talking with my House colleagues about the Senate action and how to best proceed,” Hoyer said late yesterday in a prepared statement, adding he was seeking the “most successful” outcome in the House.

Geothermal, Biomass

The rescue package would give the Treasury Department broad power to buy troubled assets, chiefly mortgage-backed securities that are burdening investors and financial institutions.

The energy tax provisions in the final legislation could still be altered from those the Senate passed by a 93-2 margin Sept. 23. That bill included $1.9 billion for an eight-year tax extension for solar energy, $5.8 billion in tax breaks for wind, geothermal, biomass and other alternative energy production and credits of as much as $7,500 for plug-in hybrid vehicle buyers.

“As soon as this legislation passes, good-paying jobs will open up in the green energy sector as wind and solar projects get up and running,” said Senate Finance Committee Chairman Max Baucus, a Montana Democrat.

“We all support the tax extenders,” said Florida Blue Dog Allen Boyd at a news conference Sept. 29. “So this debate is not about the need for those, it’s about an underlying principle of whether we, as a government, are willing to pay for the things that we buy.”

The Senate measure would pay for all of the energy tax breaks and about half of the business and individual extenders by curtailing tax breaks oil companies get for job creation and for overseas production, and by ending the ability of hedge-fund managers to defer taxes on profits earned in offshore funds.

To contact the reporters on this story: Daniel Whitten in Washington at dwhitten2@bloomberg.net

Our perspective:

The Senate has been persistant in voting to get the energy tax credit provision passed. This is politics at its’ best, they are now attaching it to the bailout bill. Although I am 100% for the energy tax credit, I feel the delemna we now face with the Wall St meltdown, should be addressed specifically, without dilluting it with special provisions that may drag the passage out longer.

We all are not happy with the bailout and we all could be pointing fingers but the bottom line is we are where we are and we must take the necessary steps to fix it. We must also determine what check valves should be instituted in the future that will will prompt us to respond sooner.

The energy tax credit is important but it should be part of an overall vision of stimulating the economy, promoting energy technology  and achieving energy independence.

Let us know your comments or email your thoughts to george@hbsadvantage.com

Washington, DC, United States [RenewableEnergyWorld.com]

The United States Senate on Tuesday voted by an overwhelming majority to extend the Production (PTC) and Investment Tax Credits (ITC). The tax measure was passed by a vote of 93-2. Now it goes back to the U.S. House of Representatives where it could be approved later this week.

“I hope they will take into account the seriousness of how difficult it has been for us to get this passed. Don’t send us back something else. We can’t get it passed.”

— Sen. Harry Reid (D-NV)

Under the legislation, the PTC will be extended for one year and the ITC will be extended for eight years. The extensions would be at least partially paid for by a change in the tax code for the oil and gas industry. The bill also contains removal of the US $2,000 cap for residential solar installations. The US $18 billion package is part of a larger tax bill worth approximately US $148 billion.

Senator Harry Reid (D-NV) expressed the difficulty he and his colleagues in the Senate have had getting the tax credits passes and warned that if the House makes changes to the bill it may not move forward.

“I hope they will take into account the seriousness of how difficult it has been for us to get this passed,” Reid said on the Senate floor. “Don’t send us back something else. We can’t get it passed.” 

There have been rumors that the House will not pass the bill as it currently stands. If changes are made to the bill in the House the Senate may have to return for a special session next week to debate the bill as the current legislative session ends for election season at the end of this week. The White House issued a Statement of Position on the bill urging its passage, a sign that President Bush would sign the legislation.

Companies in the solar industry have come out in praise of the Senate for passing the bipartisan legislation.

“We applaud the Senate for bringing the U.S. one step closer to becoming a progressive leader in the renewable energy industry, and for enabling us to compete worldwide with the many foreign countries who already have
sophisticated renewable energy programs. The eight-year extension breathes new life into the entire solar industry and will enable Clear Skies Solar to experience the explosive growth that we had originally anticipated of our company and the industry as a whole,” said Ezra Green, CEO of Clear Skies Solar.

Our Perspective:

This is great news but only the first step. Congress must takes steps to pass this bill and then President Bush must sign it. By signing this bill, Congress will be sending the message that the current energy crisis is real and that the US is willing to take the necessary steps to encourage alternative energy developement which will pave the way towards energy independence.

Let us know your thought? You may post a comment or email george@hbsadvantage.com.

Should you want to know more about solar opportunities in NJ and PA call 856-857-1230 or email us and ask about our no cost solar proforma.

 As reported TheDailyGreen.com   |  Dan Shapley   |   September 9, 2008 11:55 AM

Congress is stalling on a small bill of huge importance, the World Resources Institute reminds us: The bill would extend two renewable energy tax credits the Production Tax Credit and the Investment Tax Credit.

The tax breaks help prop up the wind, solar and other renewable energy industries. The idea is that the handouts from the government help foster competition, innovation and research that the free market wouldn’t otherwise undertake because the cost would be too high.

Congress reconvenes today to discuss, among other things, energy policy. All they’ll really be doing is posturing for their respective candidates, however, and that means that the renewable energy tax credits — which both parties and their candidates support — may well be held hostage to this battle: Republicans entrenched in support of offshore drilling, and Democrats entrenched in support of taxing oil company profits to fund more renewable energy projects.

Here are four reasons, ripped from recent headlines, that demonstrate why the tax credits should be passed, and passed soon: High oil prices, high U.S. unemployment, the melting Arctic and Russia’s overwhelming of Georgia….

Our Perspective:

Energy is a hot topic. The costs continue to increase and the public feels they are being held hostage. The next great growth industry is in energy technology. The country that takes the lead in developing energy independence thru new technologies will become a world leader.  New advancements and technologies will then become marketable to other parts of the world as we provide the vehicle for their energy evolution.

The US should grab this mantel and Congress should realize that extending the Energy Tax Credits will be the fuel needed to ignite interest in renewable energy.

Let us know your thoughts? You may leave a comment or email george@hbsadvantage.com

 As reported in Huffington Post

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.

Some $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, in many cases, cut payrolls and capital investment.

Schott Solar has visions of quadrupling its operation in Albuquerque, N.M., to reach 1,500 jobs and $500 million in investment. But the investment tax credit, company spokesman Brian Lynch said, is what makes solar power cost-competitive. Without it, expansion plans must be reconsidered.

“We don’t want to build a giant factory that the market doesn’t need or want,” Lynch said.

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

Proponents of wind power, a nascent industry that relies on skittish investors, 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.

“Investors like to know what tax policies apply when they are putting millions of dollars down on a project. There’s a pretty clear history that these projects are less likely to go forward without a credit,” he said.

Congress let the credit expire in 2000, 2002 and 2004. In those three years, wind capacity installation dropped 93 percent, 73 percent and 77 percent, respectively, from the previous year.

Navigant Consulting, which advises on renewable energy technology, 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.

“These companies are shutting down projects, firing people and it’s Congress’s fault,” said Sen. Jeff Bingaman, D-N.M., chairman of the Senate Energy and Natural Resources Committee.

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 wind, geothermal, biomass and other renewables, are only 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.

In addition to breaks for renewable energy and energy conservation, several dozen other tax breaks are targeted to businesses and individuals. They include people paying state and local sales taxes; parents with higher education tuition costs; and teachers with out-of-pocket expenses.

Almost all the provisions are popular. But Senate Republicans have blocked consideration of tax-extender plans by Senate Finance Committee Chairman Max Baucus, D-Mont. GOP lawmakers are protesting efforts to offset the costs with other taxes or other items attached to the proposals. In the House, conservative Democrats promise to block any extension that adds to the deficit.

That’s nothing new.

In 2006, Congress did not come together on a tax-extender deal until December, forcing the Internal Revenue Service to delay processing returns claiming several of the tax breaks. In 2007 Congress never agreed on extenders and again waited until December, causing more IRS disruption, to settle another annual tax crisis, the alternative minimum tax.

That tax was, enacted 40 years ago, was supposed to keep a tiny number of very rich people from avoiding taxes. But it never was adjusted for inflation and now reaches into the pockets of 4 million people, mainly upper middle-income. Millions more are threatened every year until Congress steps in, usually at the last possible moment. The Baucus bill has provisions to keep those affected by the tax from growing to 25 million, at a cost of $61 billion over the next decade.

“A big part of the problem is uncertainty,” said Marie Lee, a tax analyst with the American Electronics Association. “Our companies are getting tired of this game.”

The biggest concern for high-tech companies and manufacturers is the research and development credit, which expired at the end of last year. Some 17,700 corporations claimed $6.6 billion in credits in 2005, according to a recent study by Ernst & Young LLP. About 70 percent of that went to pay wages of scientists and engineers.

The credit has been allowed to expire 13 times since it was adopted in 1981. One repercussion, said Monica McGuire, executive secretary of the R&D Credit Coalition, is that more companies are taking their research dollars overseas.

“It’s a global race for R&D dollars,” she said, and the odds are not good when at least 20 developed nations offer tax incentives and the United States currently has nothing.

Putting expiration dates on tax breaks is a useful budget gimmick for lawmakers seeking to mask the growing federal budget deficit.

Because they are set to expire at a certain date by law, they do not count as revenue losses after that date even though most people assume Congress eventually will act to extend them. The Bush tax cuts of 2001 and 2003 are the biggest extenders of all in this respect. Trillions of dollars will be added to the federal debt if Congress chooses to make them permanent after they are set to expire in 2010.

Our perspective:

How Congress addresses this issue will tell the American people how they really feel about our energy future. As shown, they have been toying with this issue for the last 5-6 years.  Congress must commit to lead the the energy evolution. Several states are now taking the lead but we need a unified message. Passing this bill will send the message loud and clear.

Let us know your thoughts? email george@hbsadvantage.com

Does the Senate get it?

June 10, 2008

Reported excerpts from Huffington Post

WASHINGTON — Senate Republicans blocked a proposal Tuesday to tax the windfall profits of the largest oil companies, despite pleas by Democratic leaders to use the measure to address America’s anger over $4 a gallon gasoline.

The Democratic energy package would have imposed a tax on any “unreasonable” profits of the five largest U.S. oil companies and given the federal government more power to address oil market speculation that the bill’s supporters argue has added to the crude oil price surge.

“Americans are furious about what’s going on,” declared Sen. Byron Dorgan, D-N.D., and want Congress to do something about oil company profits and “an orgy of speculation” on oil markets.

But Republicans argued the Democratic proposal focusing on new oil industry taxes is not the answer to the country’s energy problems.

“The American people are clamoring for relief at the pump,” said Sen. Pete Domenici, R-N.M., but if taxes are increased on the oil companies “they will get exactly what they don’t want. The bill will raise taxes, increase imports.”

The Democrats failed, 51-43, to get the 60 votes needed to overcome a GOP filibuster and bring the energy package up for consideration.

Separately, Democrats also failed to get Republican support for a proposal to extend tax breaks for wind, solar and other alternative energy development, and for the promotion of energy efficiency and conservation. The tax breaks have either expired or are scheduled to end this year.

Our Perspective:

The republican guard held firm and would not levy a tax on the excessive profits the oil companies have recently made. Greed rules.

The senate is making a big mistake not extending the frederal tax credit for alternate energy developement. It proves that they just don’t get it.

Electric demand continues to rise at a rate of 1.5% a year. The existing facilities are already straining to meet the increase demand. In fact, rolling brown outs are in our near distant future. That’s not the answer.

New Jersey has taken great strides to incentize business and homeowner to look at alternative energy development. PSEG are paying SRECs for every 1000kwh of elecrtric you produce. These SRECs are gaurenteed for 15 years.

The Federal Government now has a 30% federal tax credit that is due to expire 12/31/08. This must be extended. The Senate and IRS must also determine the effects of this credit as it pertains to the Alternative Minimum Tax.  The Federal Tax Credit must stand alone and not be effected by the AMT; otherwise, the Federal Tax Credit is all bark and no bite. The incentive is lost and it makes the investment less desirable.

Let us know your thoughts? You may email george@hbsadvantage.com

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