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The Environmental and Energy Study Institute sponsored a Congressional briefing regarding the role of federal tax incentives for emerging energy technologies. The focal point of the briefing was a discussion of the targeted tax incentives of the Administration’s Climate Change Technology Initiative (CCTI) for fiscal year 2001. CCTI is a package of tax incentives and investments aimed at increasing energy efficiency and spurring the broader use of renewable energy. The proposed tax package contains $4.0 billion over five years in incentives for consumers who purchase energy efficient products and for producers of energy from renewable resources. This year’s CCTI tax package is $400 million greater than last year’s proposed five-year package.

The expert briefing panel included:

• Leonard Burman, deputy assistant secretary for tax analysis, U.S. Treasury;
• J. Andrew Hoerner, senior research scholar, Center for a Sustainable Economy (CSE);
• Scott Sklar, executive director, Solar Energy Industries Association (pictured above);
• Franz Wuerfmannsdobler, legislative assistant, The Honorable Robert C. Byrd (pictured below).

The Administration’s proposed tax incentives seek to encourage greater use of energy efficient and renewable energy technologies in electric power generation, vehicles, homes and building equipment.

• The package extends the 1.5 cent per kilowatt hour tax credit for the production of electricity from wind and closed-loop biomass, and provides credits for open-loop biomass facilities and coal-biomass cofiring, as well as for electricity produced from methane from certain landfills.



• The package extends the current tax credit through 2006 for qualified electric and fuel cell vehicles and includes a tax credit of $500 - $3,000 for the purchase of a qualifying hybrid vehicle from 2003-2006.



• Consumers can receive a $1,000 - $2,000 credit toward the purchase of a new energy efficient home, a 20 percent tax credit for the purchase of selected energy efficient building equipment, up to $1,000 credit for installing a solar water heating system and up to a $2,000 credit for installing a rooftop photovoltaic system.

Hoerner reported on CSE’s recent analysis entitled, "Assessing Tax Incentives for Clean Energy Technologies: A Survey of Experts Approach." By assessing the long-term market transformation effect of the proposed tax credits, the CSE study concluded that the non-environmental economic benefits would outweigh the costs by roughly five times over. The CSE analysis finds that measures to protect the climate can also benefit the economy. Additionally, CSE points out that the United States has been lagging behind Europe and Japan in the deployment of many clean energy technologies.

Geraldine Gerardi (pictured below), also from U.S. Treasury, offered additional specifics regarding several of the tax provisions.

This briefing is part of EESI's series in support of Earth Day 2000!