An editorial from the Wisconsin State Journal:
America’s effort to develop cleaner, more sustainable energy sources is threatened by the looming expiration of federal tax credits that boost renewable energy production and use.
Congress should respond this month by extending and enhancing the credits, which encourage investment in solar, wind, biomass and other renewable power sources.
A significant risk exists that at the end of this year Congress will let credits worth $500 million a year lapse, as it did three previous times. In those cases, investment in renewables fell dramatically before Congress revived the credits. Investment in wind power production, for example, fell 93 percent following the expiration of tax credits in 2000.
This year the vast majority in Congress supports extending the credits, available to homeowners, businesses and investors for buying equipment to use or produce renewable energy. But legislation extending and improving the credits is stalled by a dispute over what to do about the impact on the federal budget deficit.
The credits are part of a larger package of tax breaks scheduled to expire at the end of the year. Extending the breaks would cost the treasury $50 billion over 10 years.
Plans call for Congress to offset the lost revenue by raising fees or taxes or by cutting other programs.
Many senators and representatives are balking at the offsets.
Congress deserves praise for making sure the credits do not exacerbate the already-enormous budget deficits. But its members should also recognize the value the renewable energy tax credits have to an economy weighed down by the high cost of fossil fuels and to an environment threatened by pollution from burning fossil fuels.
With Congress scheduled to adjourn for the year at the end of this month, it’s time for its members to compromise on a package of tax credits that can be offset with reasonable fee or tax increases and program cuts.
Wisconsin has much at stake. The state has great potential to become a national leader in renewable energy.
Tax credits spur the industry by making it more cost-effective to invest in equipment to use renewable energy in homes or businesses. The credits also make it more cost-effective to invest in starting or expanding renewable energy production plants.
Allowing the credits to expire would be a setback with costly consequences.
Wisconsin’s congressional delegation should help engineer a resolution that extends the credits without enlarging the budget deficit.
The American Wind Energy Association makes it easy to contact your U.S. representatives and senators, through a page dedicated to urging members of Congress to act.