Representatives from across the US renewable energy industry on Wednesday urged members of the Senate Finance Subcommittee on Energy, Natural Resources and Infrastructure to extend tax incentives for wind, solar and biofuels that are scheduled to expire at the end of this year or next.
In a subcommittee hearing, renewable energy companies called for more long-term stability in government incentives, saying it was crucial for investment.
"Stable policy drivers will cause significantly more investment in wind energyg and domestic production will increase," said Martha Wyrsch, the president of Vestas-American Wind Technology.
"For this industry's continued success, it is critical that Congress immediately extend the [production tax credit]," she said. "The impact of allowing the PTC to expire — or extending it at the last hour — is much greater that in previous years."
Wyrsch warned that 37,000 jobs could be lost if the credit is not extended.
The wind energy has long complained that the production tax credit, which provides developers a tax credit during the first 10 years of a facility's operation, has been allowed to lapse three times before being extended. Each lapse resulted in a downturn in the industry. The PTC is set to expire again at the end of 2012.
In addition, some incentives targeting renewable fuels, such as ethanol and biodiesel, are scheduled to expire this year. Anther incentive aimed at cellulosic biofuel is set to expire at the end of 2012.
Paul Soanes, the president and CEO of Houston, Texas-based Renewable Biofuels, told the subcommittee that he attributed the growth of the biofuels industry to federal incentives and said that when they lapsed in 2010, production dropped 40%. He also warned that if the credit is allowed to expire at the end of the year, plant closures and job cuts would follow.
"Uncertainty over the extension of the tax credit and the price of biodiesel will drive purchasers to the sidelines once again, significantly curtailing domestic market demand and production capacity, availability of working capital, investor confidence and ultimately putting at risk the tremendous production and job gains of 2011," he said.
Senator Jeff Bingaman, a New Mexico Democrat and the chairman of the committee, agreed that tax policy should be more consistent.
"Allowing those incentives to expire will have, in my view, a negative impact on the country's ability to develop alternative-energy resources," Bingaman said. "Manufacturers, developers and investors routinely face significant uncertainty surrounding federal policy."
Although many Democratic senators on the subcommittee were symphathic to the concerns of industry, the senior Republican on the panel, Senator John Cornyn of Texas, said that while there needs to be predictability in tax policy, renewable-energy incentives should not last forever.
"The time has come to evaluate tax policy based on value to the taxpayer," Cornyn said. "Our current tax code is a neverending maze of twists and turns that can only confuse and befuddle the experts. It is in dire need of reform, and nothing, nothing should be off the table."
Senator Barbara Boxer, a California Democrat who chairs the Senate Environment and Public Works Committee, has said in recent weeks that senior lawmakers aim to include the extension of energy tax credits in a year-end legislative package that would extend tax provisions set to soon expire. However, some analysts have been skeptical that Congress can act before the tax incentives expire on December 31.