WASHINGTON - President Bush approved a bill that will extend federal tax credits for various renewable energy and energy efficiency projects. The wide-ranging Tax Relief and Health Care Act of 2006 extends the production tax credit through 2008 for electricity produced from wind power, geothermal power, biomass, landfill gas, small irrigation power, and trash combustion facilities. It provides a similar one-year tax credit extension for new properties that produce geothermal power or make use of solar energy; for homeowners that purchase solar water heating, solar photovoltaic, or fuel cell systems; for businesses that purchase fiber-optic lighting systems, solar energy systems, or fuel cell power plants; for new energy efficient homes; and for energy efficiency improvements to commercial buildings.
The act extends the Clean Renewable Energy Bonds program through 2008, and increases the total annual amount of tax-credit bonds to $1.2 billion. It extends special tax allowances for cellulosic ethanol facilities to include plants placed in service by 2012. It also extends the research and development tax credit, which encourages businesses to invest in new innovations.