WASHINGTON (December 16, 2013) – Senator Edward J. Markey (D-Mass.) and 23 of his Senate colleagues today asked the leaders of the Senate Finance Committee to renew vital clean energy tax incentives that are facing expiration at the end of this year. The tax incentives, which range from credits to produce renewable energy to encouraging domestic manufacturing to incentivizing cleaner vehicles, have a proven track record of creating jobs in America and cutting the pollution that drives climate change.
The letter, sent by Senator Markey and his colleagues to Finance Chairman Max Baucus and Ranking Member Orrin Hatch, outlines 10 key tax credits that deserve permanent or longer-term extensions, or at the very least short-term extensions, instead of allowing them to expire at the end of this year. Chairman Baucus has been leading an effort to conduct comprehensive tax reform.
“If a broader tax code overhaul cannot be achieved by year’s end, it is imperative that these key clean energy tax incentives are renewed as soon as possible,” writes Senator Markey and his colleagues. “These tax credits have helped scale up production and drive down the cost of clean energy technologies. They remain critical to addressing the market failures that prevent cost-effective, market-ready technologies from being deployed to their full potential. With continued support, clean energy will help Americans save money on their energy bills and reduce harmful pollution.”
The 10 tax credits and incentives listed in the letter include:
--Renewable Electricity Production Tax Credit (PTC). This provision, which is set to expire at the end of the year, has been a critical tool to support investments in renewable energy and other low-carbon sources. Allowing this credit to expire for wind production would threaten more than 80,000 jobs across nearly every state.
--Investment Tax Credit (ITC). This tax credit traditionally supports the deployment of solar heating and electric generation, fuel cells, combined heat and power systems, small wind, geothermal heat pumps, and microturbines.
--Tax Credits for Efficient New Homes and Appliances. The tax credit for energy efficient new homes provides a credit for new homes that reduce heating and cooling energy consumption by 50 percent.
--Credits for Hybrid Medium- and Heavy-Duty Trucks. Medium- and heavy-duty vehicles are second only to automobiles in oil consumption, and they are responsible for 20 percent of U.S. transportation-based global warming pollution.
The full letter is pasted below.
Along with Senator Markey, the letter was signed by Senators Richard Blumenthal (D-Conn.), Barbara Boxer (D-Calif.), Chris Coons (D-Del.), Dianne Feinstein (D-Calif.), Al Franken (D-Minn.), Kirsten Gillibrand (D-N.Y.), Tom Harkin (D-Iowa), Martin Heinrich (D-N.M.), Mazie Hirono (D-Hawaii), Tim Johnson (D-S.D.), Angus King (I-Maine), Amy Klobuchar (D-Minn.), Patrick Leahy (D-Vt.), Jeff Merkley (D-Ore.), Barbara Mikulski (D-Md.), Chris Murphy (D-Conn.), Brian Schatz (D-Hawaii), Bernie Sanders (I-Vt.), Jeanne Shaheen (D-N.H.), Jack Reed (D-R.I.), Tom Udall (D-N.M.), Elizabeth Warren (D-Mass.), and Sheldon Whitehouse (D-R.I.).
December 16, 2013
The Honorable Max Baucus The Honorable Orrin G. Hatch
Chairman Ranking Member
Senate Committee on Finance Senate Committee on Finance
511 Hart Senate Office Building 104 Hart Senate Office Building
Washington, DC 20510 Washington, DC 20510
Dear Chairman Baucus and Ranking Member Hatch:
The nation’s tax code is in need of comprehensive reform, and we support your continued efforts to ensure that our tax code better reflects America’s priorities and values. However, as we approach the end of the calendar year, many tax programs that are critical for creating jobs, deploying clean energy, and cutting pollution are facing expiration. If a broader tax code overhaul cannot be achieved by year’s end, it is imperative that these key clean energy tax incentives are renewed as soon as possible.
In recent years, provisions like the production tax credit and the investment tax credit have helped technologies like wind and solar create tens of thousands of American jobs and generate an increasing share of America’s power. These tax credits have helped scale up production and drive down the cost of clean energy technologies. They remain critical to addressing the market failures that prevent cost-effective, market-ready technologies from being deployed to their full potential. With continued support, clean energy will help Americans save money on their energy bills and reduce harmful pollution.
The tax incentives below have a demonstrated history of providing strong economic and environmental benefits. They have garnered bipartisan support. In the context of a tax code that has permanent tax entitlements to oil and gas, nuclear, and other energy technologies, these programs merit permanent or long-term extensions. At a minimum, they should each be extended in the short term or until a more comprehensive tax reform agreement is in place.
While the National Renewable Energy Lab has estimated that the United States has more than 4,000,000 megawatts of untapped offshore wind potential—enough to meet the power needs of the entire nation—there are currently no offshore wind facilities operating in U.S. waters. This is due in large part to the long planning horizon of these projects and the short-term nature of the tax credits. A long-term extension of the ITC for offshore wind is needed to jumpstart this industry. Additionally, changing the applicability of the ITC from projects that are operational by the expiration date to projects that have commenced construction would make the tax credit consistent with the PTC and help drive the deployment of thousands of megawatts of additional new solar capacity. This change would allow the American solar industry, which has grown from 15,000 employees in 2005 to 120,000 today, to continue creating jobs in the United States.
Clean energy tax incentives are critical to ensuring that American consumers have access to clean, low-cost energy and critical to keeping American businesses and workers competitive in this key growth sector of the global economy. We urge you to include these incentives in any tax extender package that the Senate considers.