Wednesday, December 8, 2010

Analyst contemplates fate of renewable energy tax credits

Renewable energy tax credits were set to expire at yearend, but they might have beaten the odds. Proposed extenders for energy tax credits made it into a US Senate tax-extenders compromise.

US President Barack Obama announced a tax deal late Dec. 6 in which he proposed to temporarily renew Bush administration tax cuts. On Dec. 9, Senate Democrates released a draft of a tax extenders compromise.

In a Dec. 10 policy update note, FBR Capital Markets analyst Benjamin Salisbury said he doubts that conservatives will oppose the Bush tax cuts because of the energy extensions.

The Senate tax-extenders draft includes a 1-year extension of the renewable energy cash-grant in lieu of investment tax credit. This applies to wind and solar. The draft also includes a 1-year extension of the ethanol excise tax credit.

Salisbury notes the draft did not include new incentives for natural gas vehicles as advocated by Texas businessman T. Boone Pickens.

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