Hope under the sun? Senators propose extending renewable energy tax credit

Suppliers in the renewable-energy industry have tried just about everything to pass a law to renew an important investment tax credit that is set to expire at the end of this year.

On Thursday, Sens. Mary Cantwell (D-Wash.) and Senator John Ensign (R-Nev.) introduced a bill that would extend that credit and provide incentives for energy-efficiency measures.

The Clean Energy Tax Stimulus Act of 2008 ( click here for PDF) extends the investment tax credit for eight more years for businesses.

Consumers would have the existing 30 percent federal tax credit on renewable energy projects, such as solar panels, extended another year and the $2,000 cap removed.

The bill doesn't detail how the tax credits would be paid for, which is a crucial question.

Previous proposals attempted to pay for the renewed tax credit by rescinding existing tax breaks on oil companies. Those proposals were defeated in the Senate and were threatened by a White House veto at the end of last year.

For several months, executives in the solar and wind industries have been complaining that the lack of policy certainty is stalling the U.S. clean energy industry. In particular, large industrial investments, such as utility-scale wind and solar plants, are being pushed back or scrapped, according to people in the industry.

The Solar Energy Industries Association put out a statement on Thursday applauding the move.