WASHINGTON — Representatives from all corners of the renewable energy industry on Thursday urged Congress to extend tax credits for the production of geothermal, solar and wind power set to expire next year.
Testifying before a House Ways and Means subcommittee, six witnesses made pitches for long-term tax breaks that they said would encourage investment and spark economic growth.
Long-range tax credits could prove especially valuable in Nevada, the second-leading producer of geothermal energy, said Karl Gawell, executive director of the Geothermal Energy Association.
If the credits are extended five years, Gawell predicted, geothermal power could account for half of the energy consumed in Nevada, boosting the state’s economy and creating jobs.
Geothermal energy works by harnessing underground steam and hot water. California is the only state that produces more geothermal energy than Nevada.
The tax credit allows wind energy producers to compete with more established means of energy production that are currently cheaper to operate, said Jaime Steve, legislative director for the American Wind Energy Association.
“These incentives are needed because wind energy is still not yet fully cost competitive with mature electric generation technologies,” Steve said.
Last December, Congress approved a bundle of tax breaks that extended until Dec. 31, 2008, an incentive granting 1.9 cents per kilowatt hour of energy created by new renewable energy investments.
But investors often pass up opportunities to build renewable energy plants that can’t be completed until after the deadline and won’t qualify for the tax break, Gawell said during his testimony.
“The industry is up and down year after year,” he said. “We need a long-term extension of the tax credit, that’s for sure.”
The witnesses represented a wide range of the renewable energy industry, including the ethanol production, wind, biomass, geothermal, solar, fuel cell and clean coal industries.
Increased renewable energy production would also reduce U.S. dependence on foreign energy, said Rhone Resch, president of the Solar Energy Industries Association.
Congress is holding hearings on a range of energy matters as lawmakers are preparing bills they hope to bring before the House and Senate by the summer.
Rep. Jim McDermott, D-Wash., questioned extending the tax cuts. He emphasized energy conservation instead.
“We’re wasting energy all the time,” McDermott said.