After several days of robust debate, the Senate is edging closer to a floor vote on a stimulus bill. Several amendments to the draft of the bill were offered and passed this week, with many other changes still under consideration. Democratic leaders are pushing to pass a Senate bill tonight or over the weekend.
In our prior advisory of January 27, we described the main renewable energy tax incentives of the current versions of the House and Senate bills.1 This advisory provides an update on the status of those incentives in the Senate.
None of the amendments passed this week has stripped renewable energy tax incentives from the Senate bill. However, amendments are currently being considered that would decrease stimulus spending on both energy efficiency and on a government loan guarantee program benefitting renewable energy projects.
A Senate amendment may seek to cut in half the $10 billion currently authorized by the Senate bill to fund a new, four-year Department of Energy (DOE) loan guarantee program to benefit renewable energy and transmission projects using commercially viable technologies. (The House bill authorizes $8 billion for a three-year program.) This potential reduction seems part of the wider effort to reduce opposition to the bill by reducing its overall cost and does not appear reflective of specific concerns about the program. Although existing law already provides for a DOE loan guarantee program to assist in the development of certain renewable and other energy projects, the current program (1) is available only for more innovative technologies that have not yet been commercialized on a large scale, and (2) has been very slow to implement, not having resulted in a single DOE guarantee to date. The new DOE loan guarantee program would be available to a broad range of commercial renewable energy projects and would, presumably, be put on a faster track. It seems likely that the Senate bill as passed will contain funding for a new loan program, but the dollar amount may take a haircut later today or over the weekend.
Also, Senate amendments are being considered that would reduce, by at least $1.5 billion, stimulus spending on energy efficiency research, development or deployment. The current Senate bill includes funding for energy efficiency research and to promote energy efficiency improvements for industry ($2.6 billion), as well as funding for energy efficiency job training and energy efficiency upgrades at military facilities.
No amendment has yet been, or will be, proposed that would add a refundable investment tax credit to the Senate version of the bill. The House bill passed January 28 permits taxpayers to exchange production tax credits—arising in 2009 and 2010 with respect to qualifying renewable energy projects—for investment tax credits, and permits the further exchange of investment tax credits for cash under a newly created DOE grant program. While the current version of the Senate bill would permit the exchange of production tax credits for investment tax credits, it would not provide for refundability through DOE. Tax credit refundability will be the most critical difference between the House and Senate bills pertaining to renewable energy tax incentives.
Once a Senate bill is passed, the House and Senate versions will go into conference for resolution of differences between the two. President Obama has asked Congress to send him a bill by the end of next week.