The House of Representatives approved the Renewable Energy and Energy Conservation Tax Act of 2008 (H.R. 5351) in February 2008. But with massive Republican opposition to eliminating tax breaks for oil and gas companies, Senators John Ensign, R-Nev. and Sen. Maria Cantwell, D-Michigan, have recently introduced a slightly different bill, The Clean Energy Tax Stimulus Act of 2008. Energy Tax packages have failed repeatedly on the Senate floor, including a $22 billion version that fell one vote short of winning approval as an amendment to a broader energy bill (PL 110-140) in December 2007. 

What effect will either bill have on homeowners?

Both bills will essentially restore much of what was dropped from the Energy Bill that was defeated at the end of 2007. The legislation will extend credits for energy-efficiency improvements to homes, credits for energy-efficient appliances, will raise the cap on the credits for solar electric and will introduce a new credit for residential wind applications.

Furthermore, both packages will provide some certainty to investors and businesses considering investing in the renewable energy sector. As much as $20 billion of anticipated investment in 2008 may be delayed or cancelled if an energy tax stimulus package isn't passed¹.

In order to pay for the tax incentives, the House bill includes a provision that eliminates the manufacturing deduction that is currently provided to oil and gas producers. The change would increase revenues by $13.57 billion to the U.S. Treasury. As of 4/1/08, details on whether or not the Ensign-Cantwell proposal will include the oil and gas tax break roll backs have not been released.

President Bush has vowed to veto any bill that rolls back oil and gas company tax breaks. The struggling oil companies, faced with burdensome tax increases, will be "destabilized" and forced to raise their prices at the pumps in order to eke out the extra money they need to do necessary research and development². With the threat of veto and Republican opposition, the House bill H.R. 5351 will likely stagnate in the Senate. If the Ensign-Cantwell plan also includes rolling back big oil tax breaks, it will likely face the same fate.

On 4/10/08, the Senate passed a bipartisan bill to ease the strain of the housing crisis on homeowners. The Ensign-Cantwell proposal was attached to the housing bill. It now go back to the House, where it will likely be modified. H.R. 5351 will likely go before the Senate by the end of April 2008.

The good news is that renewable tax credit legislation keeps popping up in Congress. Stay informed about voting results at GovTrack.us.

¹Senator John Ensign, "Ensign Bill Encourages Development of Renewable Energy", April 3, 2008, http://ensign.senate.gov/record.cfm?id=295508&.

²David S. Cohen, "2008 Renewable Energy Act Tries One More Time", March 2008, The Light Connection, http://www.lightconnection.us/article8.htm