Washington DC, U.S. 11/3/11 (PennWell) – The introduction of the American Renewable Energy Production Tax Credit Extension Act (H.R. 3307) by U.S. Representatives Dave Reichert (R-WA) and Earl Blumenauer (D-OR) will stretch current production tax incentives for all renewable energy forms through 2016.
Created as the Energy Policy Act of 1992 almost two decades ago, the legislation has frequently been extended in an effort to prevent renewable energy projects and research from slumping.
Historically, financial lenders have been hesitant in providing capital in the months leading up to the PTC’s expiration, sometimes preventing projects from coming online.
The current incentive – established by the Energy Policy Act of 2005 – was to have expired in 2012 for wind power, and 2013 for geothermal and hydro power.
“Renewable energy resources play an important and increasing role in America’s total energy supply,” Reichert said. “The certainty this bipartisan bill will provide can further spur growth in this vital sector, increase economic development and create jobs.”
The bill does not, however, increase the amount of production tax incentive that will be received by the hydropower sector. Hydro will maintain its 1.1 cents/kWh PTC, while other renewables will stay at 2.2 cents/kWh.
Still, H.R. 3307 is good for the future of the industry, said National Hydropower Association executive director Linda Church Ciocci.
“Extending hydropower tax incentives provides developers financial certainty and will bring additional clean, affordable and reliable hydroelectric power to more American families,” Ciocci said. “A long-term PTC extension sends a market signal supporting project development, in turn leveraging significant private investment.”