Seeking credit for renewable energy

Introduction

Everyone is in favor of renewable energy — even members of Congress who have voted against it repeatedly. Such are the strange politics behind the federal tax credits that help keep alive wind, solar, and other forms of alternative energy.

Renewable energy projects rely on these subsidies to compete with cheaper coal-fired power. But Congress typically approves the tax breaks only for short stretches of time, making it difficult for large-scale, multi-year projects to obtain needed financing. The last extension for solar was a one-year measure passed last December; for wind and other technologies, Congress last extended the tax breaks in 2006. The renewable energy industry is making a last-ditch effort to get the tax credits renewed this month before Congress takes its pre-election break; if that doesn’t happen, all the subsidies are set to expire in December.

The prospects are dim. Consider this: The Senate already has voted on the renewable energy tax credits eight times since June 2007, and seven times failed to muster the 60 votes needed to overcome a GOP filibuster opposing them. The one time the Senate managed to pass the measure, April 10, happened to be, not so coincidentally, the one time the bill had zero chance of becoming law. The reason: the senators provided no mechanism to pay for those $6.6 billion in subsidies. And that approach was dead-on-arrival in the House, where the Democratic leadership is laboring to show its commitment to fiscal restraint, having passed a pay-as-you-go budget rule soon after taking the helm in January 2007.

Still, politically, a lot was riding on that 88-8 vote in April. That’s because several Republican senators now on the campaign trail can say quite truthfully that they voted for renewable energy (once), even though they cast “no” votes on the industry’s most important issue up to seven times. Among them:

• Mike Enzi of Wyoming “supports diversifying our energy portfolio to include more alternative and renewable energy resources such as wind, solar, hydro-electric, and nuclear energy. I have supported providing tax incentives for investments in these energy sources,” he says on his website.

• John Sununu of New Hampshire wrote in the New Hampshire Union Leader: “I have cosponsored legislation to extend and strengthen the tax credits available for alternatives, and I will continue to insist that they be part of our national supply network.”

• Pat Roberts of Kansas “has also cosponsored legislation to extend tax credits for solar, wind, and other renewable energy production,” said a press release from his office July 29, one day before he cast his sixth “no” vote on the tax credits.

The Republicans contend their apparent flip-flopping requires some context. They’re all for alternative energy, they say. They have voted in opposition because of the unpalatable vehicles the Democrats have proposed to pay for the revenue that would be lost by renewing the subsidies — proposals like ending certain tax breaks for oil companies or for hedge fund managers.

Indeed, both parties know the game on energy legislation. The House and Senate are now set to take a series of votes on whether to open up more federal land and offshore areas to oil drilling. However, conservative Republicans have been vocal in their opposition to the compromise packages unveiled so far, arguing they don’t open up enough offshore drilling, or they put too heavy a tax burden on the oil companies. But even if none of the energy bills make it into law, the votes will give Democrats up for reelection a much-needed chance to say they voted in favor of oil drilling. Trouble is, the latest version of tax credits for renewable energy is tied up in the drilling bills.

So whether you think oil or alternatives are the solution for the nation’s energy woes, expect an intense month of debate on Capitol Hill, with little light — or sun or wind power, either — at the end of the tunnel.

Matthew Lewis contributed to this report.