Can tax credits, grant programs, and other federal initiatives sustain renewable energy development absent major legislation like a renewable electricity standard?
If the 111th Congress takes up any type of energy legislation during its lame-duck session, it will be financial incentives tucked away in an omnibus tax extenders bill. About $7 billion in tax credits and grants for energy from solar, wind, geothermal, and ethanol are set to expire at the end of this year. Renewable and environmental groups are lobbying hard to get Congress to extend them, saying that if incentives aren't renewed, their nascent sectors will grind to a halt.
If the credits aren't renewed by the end of this year, they'll likely hit steep opposition in the coming Congress, with its aggressive focus on slashing federal spending.
Even if they are extended, will the tax breaks be enough to spur renewable energy development given the bleak political landscape for a renewable electricity standard and a price on greenhouse gas emissions? Should Congress focus instead on promoting low-pollution forms of more traditional energy sources, such as natural gas, nuclear power, and clean coal technology?