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Solar, Wind And Other Renewable Energy Tax Breaks

After many attempts to get about $18 billion of renewable tax credits passed this year, the U.S. Senate finally approved it. It was by a small margin either, the vote passed 93-2 for extending the set of tax credits for businesses as well as residents who invest in renewable energies, from building and operating power plants to installing small wind turbines on residential properties.

This decision was well overdue and was looked upon favorably on Wall Street yesterday and continues today as stocks rise on the great news. The Alternative energy companies executives and investors have been waiting for Congress to extend the investment tax credits that can save 30% of the cost of a solar project.

The Senate as well as the House of Representatives have been bumping heads trying to extend the incentives, but as usual they disagreed on how to pay for the incentives. The bill still has to be approved by the House since the Senate’s bill altered the house’s version (I’m not surprised). The White House said that it would support the bill. Who know if this will get done before both house will adjiurn after tommorrow.

Because of the dead-lock in Washington, many solar company stocks have stalled because the companies said they wouldn’t able to build any more U.S. power plants without the incentives. Barry Cinnamon CEO of Akeena Solar (NASDAQ: AKNS) commented in a statement, “We know with certainty that the extension of these credits sends out a green ripple effect: solar projects on hold can now move forward, America creates new green-collar jobs with over 214,000 in California alone, and businesses and homeowners can count on lower energy bills in a time of economic hardship.”

The Senate’s version of the bill will also include tax credits for consumers that install solar panels on their properties and will be extended for eight years and eliminates the present $2000 cap on the credits. It would also allow homeowners installing small-wind equipment and geothermal heat pumps to take advantage of the credits, The amounts would be capped at $4,000 for wind and $2,000 for the heat pumps.

Consumers would receive a $2,500 to $7,500 rebate for buying plug-in electric cars and trucks. Felix Kramer, the Co-founder of CalCars.org, a promoter of plug-in hybrid and electric cars said, “This will have an enormous impact” Given his estimates that automakers could make current hybrids into plug-in hybrids for an additional $3,000 to $5,000, the tax credits “could conceivably entirely remove the cost increment that carmakers say is the cause of their reluctance” to build plug-in hybrids.

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