House Votes to Extend Renewable Energy Tax Credit

State Representatives voted unanimously yesterday to increase the maximum tax credit for a renewable energy project from $10 million to $20 million.

From the Oregonian:

The Oregon House voted unanimously Monday to expand the state's tax credits for renewable energy, approving tax breaks designed to attract more manufacturers of energy equipment.

The use of renewable-energy tax credits is skyrocketing. State revenue officials estimated this month that the existing credits the state gives to users and makers of renewable-energy equipment will grow from $10 million this year to nearly $100 million a year by 2013.

That was after the Legislature increased the maximum tax credit for a qualifying project to $10 million last year, up from $3.5 million. Now, House Bill 3619 would increase that ceiling to $20 million for manufacturers. Monday's vote sends it to the Senate for final approval.

Democrats and Republicans alike say the credits are worth the loss of money for the state budget because of the jobs and income taxes that manufacturers of renewable-energy equipment will bring with them.

The renewable energy tax credits are part of a larger program:

Tax credits for renewable energy are part of a program called business energy tax credits. For qualifying projects, recipients receive the tax credits spread over five years.

The state Department of Energy gave final approval to tax credits for more than $300 million worth of projects in 2006 and 2007, according to the Legislative Revenue Office. The credits would be 35 percent to 50 percent of those costs.

Renewable-energy projects made up less than a quarter of those facilities. Instead, the bulk of those credits were for conservation projects -- such as a business installing energy-efficient lights -- that were not included in the state's projections of the rapidly increasing costs of renewable-energy credits.

House Bill 3619 gives the Department of Energy the responsibility for setting criteria for manufacturers of renewable-energy equipment to receive the tax credits, such as standards for the minimum increase in employment at a facility.

The tax credits can be sold, and the legislation specifies that a purchaser of those credits would not be held responsible if the state revokes a manufacturer's certification.

Read the rest. Discuss.