Energy Tax Credits and the Devil in Congress

By Elisa Wood

October 2, 2008

It is difficult to get beyond the hyperbole of the election season to uncover a candidate’s true position. The non-partisan Pew Center on Global Climate Change performed a service with a recently released just-the-facts guide on the energy platforms of the presidential contenders http://www.pewclimate.org/voter-guide.

What is remarkable about this year’s election, Pew says, is that “both major party candidates for the presidency are deeply concerned about global climate change and publicly support a mandatory, economy-wide cap-and-trade system for reducing the U.S. greenhouse gas (GHG) emissions.”

What does this mean in a practical sense for energy efficiency markets? “Both candidates recognize that improving energy efficiency across the economy can be a powerful tool for reducing GHG emissions,” Pew says.

Sen. John McCain says he would create higher efficiency standards for new or retrofitted buildings leased or purchased by the federal government, the largest energy consumer in the world. McCain also promotes investments to upgrade and smarten the national electricity grid.

Sen. Barrack Obama would set national standards to reduce demand by 15%; make new buildings carbon-neutral or zero-emission by 2030; improve new building efficiency by 50% and existing building efficiency by 25%; improve efficiency in all new federal buildings by 40%; and make federal buildings zero-emitting by 2025.

The policies of both candidates sound positive. Of course, the devil is always in the details.

The devil also appears to be in Congress. One wonders if these policies would make it through Congress, given lawmakers’ treatment this year of the all-important tax incentives for efficiency and clean energy. Most lawmakers claim to support the tax credits, many of which expire at the end of this year or already have expired. Yet Congress wrangled all year over the incentives without extending them, mostly for reasons that had little to do with the credits and their merits. Now, at the 11th hour, just before recessing, the Senate has approved the ‘tax-extenders bill’ as part of the credit-crisis bail-out package. The House reportedly will take up the bill Friday, Oct. 3.

Long-time energy lobbyist Scott Sklar has watched Congress’ shenanigans from a front row seat and explains why he is “hopping mad” about treatment of the tax incentives in an insightful Renewable Energy Weekly column, “Fuming in D.C.” http://www.renewableenergyworld.com/rea/news/recolumnists/story?id=53711

Why is the tax-extender bill important to energy efficiency markets? The Senate bill includes tax incentives for consumers and building owners who install energy-efficient products, builders of energy-efficient new homes and commercial buildings, and manufacturers of certain energy-efficient appliances, according to the Alliance to Save Energy. The bill also includes incentives for combined heat and power.

“Congress is preparing to pass one of the largest pieces of legislation in a century to bail out Wall Street and, with that in mind, it is unthinkable that Congress would adjourn before providing critical tax incentives to ‘Main Street’ to help consumers facing a lagging economy and growing energy costs and the nascent clean energy industry, so that it can create new jobs and help to build a new ‘green’ economy,” said Kateri Callahan, ASE president.

Unthinkable, yes. Improbable? We’ll know after Friday.

Visit energy writer Lisa Wood and pick up her free Energy Efficiency Markets newsletter and podcast by clicking on www.realenergywriters.com.