US green energy tax breaks secure House victory

US clean technology firms campaigning for an extension to renewable energy tax credits secured a victory yesterday when the House of Representatives voted in favour of extending the credits.

The Renewable Energy and Job Creation Act of 2008 (H.R. 6049) was approved by a vote of 263 to 160. The $54bn (£27bn) package of incentives, which also includes tax breaks for education and business expenses, would deliver a six-year extension of existing solar energy tax credits, three-year extensions of credits on biomass, geothermal, hydro and waste-to-energy projects, and a one-year extension of tax credits for wind energy. The current tax credits are scheduled to expire at the end of this year. It also introduces fresh incentives to promote the development of energy efficient products and buildings and second-generation biofuels.

The renewable energy industry has been campaigning for the package to be approved, warning that 100,000 jobs and up to $20bn of investment is at risk if the credits are allowed to lapse.

Rhone Resch of the Solar Energy Industries Association (SEIA) welcomed the vote and urged senators to also back the legislation, arguing that it has the potential to create tens of thousands of " green collar jobs" at a time when the economy could do with just such a stimulus.

"Allowing the solar tax credit to expire is an enormous tax increase that will cost thousands of American jobs and billions in economic investment," he added. "Without this bill our national energy security will continue to be jeopardised by skyrocketing fuel prices from unreliable suppliers."

However, it remains unclear if the bill will secure the support it requires. Washington observers claim that the Senate appears less inclined to support the bill due to concerns over funding, while President Bush has signalled that he will veto the legislation.