WASHINGTON - The $700 billion Emergency Economic Stabilization Act of 2008 that President Bush signed into law also extended and enhanced tax credits and financing related to renewable energy and energy efficiency.
While the production tax credit extensions and enhancements will aid all major renewable energy sources, arguably the biggest winner in the tax bill is solar energy, which gained an eight-year extension (through 2016) of the 30 percent tax credit for residential and commercial solar installations, as well as the elimination of the $2,000 tax credit cap for residential solar electric installations. The Solar Energy Industries Association (SEIA) expects the creation of more than 440,000 jobs and the generation of at least $325 billion in private investment due to those changes, which should yield more than 28 gigawatts of solar power.
In terms of energy efficiency and alternative fuels, the act extends and revives a number of energy efficiency tax incentives for buildings, and extends and modifies tax credits for biofuels. Specifically, it extends energy efficiency tax deductions for commercial buildings through 2013 and revives similar deductions for home improvements installed in 2009, adding a new $300 tax credit for energy-efficient biomass fuel stoves. It also extends tax credits for builders of new energy-efficient homes through 2009 and increases tax credits for manufacturers of energy-efficient appliances, while extending that credit through 2010. For biofuel producers, the act extends a 50 percent first-year depreciation for cellulosic biomass ethanol plants to include any plant producing biofuels from cellulosic (non-food) biomass sources. The act also extends through 2009 a production tax credit of $1 per gallon for biodiesel and other biomass-based diesel fuels and a credit of 10 cents per gallon for small biodiesel producers, but it cuts the production tax credit for renewable diesel blended with petroleum to 50 cents per gallon, while closing a loophole that allowed foreign producers to earn a U.S. tax credit.