When President Bush signed the $700 billion financial market bailout plan Oct. 3, he renewed $18 billion in energy tax credits contained in the bill that was speedily passed by Congress last week. The tax credits, which were set to expire at year's end, are for investments in renewable energy--from building and operating solar and wind power plants to installing small wind turbines in backyards and solar roofs on houses. Passage of the bill ended more than a year of bickering between the House and the Senate over extending the credits.
The NAHB is one of the many organizations that supported extension of the tax credits. "Home buyers are asking for energy efficiency, and our members build homes that are significantly more energy efficient than those of a generation ago," said executive vice president and CEO Jerry Howard in a statement. "But in today's economic climate, home builders need incentives to spur them to even more action."
Home builders will receive a tax credit of $1,000 for a house that reduces heating and cooling consumption by 30% and a $2,000 credit for meeting a 50% reduction.
Other industries also applauded the renewal of the tax credits. "By passing this bill, Congress has finally given the solar energy industry 'policy certainty' that will attract investment, expand manufacturing, and lower the cost of solar energy to consumers," said Roger Efird, chairman of the Solar Energy Industries Association and president of Suntech America, in a statement. "This will allow companies like mine to move forward with expansion plans to serve the growing U.S. market."
Among other things, the legislation includes $1.9 billion for an eight-year tax extension for solar energy, $5.8 billion for wind, geothermal, biomass, and other alternative-energy production. It also creates a new category of tax credit bonds to finance state and local government initiatives to cut greenhouse gas emissions and extend tax credits for homeowners who purchase energy-efficient products, including biomass fuel stoves, which for the first time would qualify for a $300 credit. Meanwhile, residential wind turbines qualify for a $4,000 credit and heat pumps, a $2,000 credit.