"Time running out" for US renewables tax breaks

Fear is mounting that US renewable energy tax credits could be allowed to lapse at the end of the year putting tens of thousands of jobs at risk after the US Senate failed for the eighth time to agree an extension to the current package of tax breaks.

Experts had predicted that a compromise could be reached before the end of the year in the long running saga, which has seen Republicans and Democrats split over how to fund an extension to the package of tax incentives designed to boost investment in renewable energy.

But following the failure this week of the latest bill to contain an extension of the tax credits, concern is building that the tax breaks could be allowed to lapse – a scenario experts claim would have a disastrous impact on the financial viability of many green energy projects.

The bill, introduced by Senate tax committee chairman Max Baucus and Senate majority leader Harry Reid had contained a one year extension to the renewable energy production tax credit and a small wind turbine investment tax credit, as well as provisions to extend the credits by a further eight years. However, it failed to secure the 60 votes required to proceed, the motion failing by a vote of 51 to 43.

Solar Energy Industries Association president Rhone Resch said that projects were already being postponed as a result of the uncertainty surrounding the future of the tax credits. "Time is running out to extend the solar tax credits and without passage in the immediate future, tens of thousands of jobs, and billions of dollars will be lost in new solar investment," he warned. "Already companies are putting projects on hold and preparing to send thousands of jobs overseas – real jobs that would otherwise be filled by American workers."

Gregory Wetstone, senior director of governmental and public affairs at the American Wind Energy Association, said that a failure to extend the credits would have dire consequences for the US renewables sector, arguing that 116,000 jobs and $19bn in investment would be at risk.

He added that ambitious proposals for a huge increase in wind energy capacity, such as those recently put forward by oil billionaire T. Boone Pickens, would struggle to be realised without the extension of the tax credits. “We have to begin by continuing the one major federal policy we have that promotes renewable energy – the renewable production tax credit," he said.