The U.S. House of Representatives Thursday passed a wide-ranging energy bill that included a $21.5 billion package of tax incentives for renewable energy sources like wind and solar over 10 years.
The price tag is financed mostly by raising taxes or revoking existing tax breaks for traditional oil and natural gas production.
Here is a summary of the big-ticket items in the Clean Renewable Energy and Conservation Tax Act of 2007, and a breakdown of their cost over 10 years, according to the Senate Finance Committee, which worked with House lawmakers to craft the package:
- Repeals Section 199 tax deduction for major integrated oil companies, generating $10 billion over 10 years.
- Drops Section 907 foreign income tax deductions for companies that produce oil and natural gas overseas, raising $3.19 billion over 10 years.
- Ends tax break for companies to write off some exploration expenses over seven years, raising $4.1 billionover 10 years.
Renewable energy incentives:
- Extends tax credits to produce energy from renewable sources like wind, biomass, geothermal, landfill gas and trash-burning facilities. Tax credits extended by four years through Dec. 31, 2012. Cost is $6.6 billion over 10 years.
- Extends 30 percent investment tax credits for businesses to install solar, fuel cells, and 10 percent tax credit to install microturbines through the end of 2016, and gives new 10 percent tax credit for combined heat and power projects. Cost is $602 million over 10 years.
- Extends tax credit for home energy efficiency projects like roof-top solar arrays, solar water heating and fuel cells for six years until end of 2014, raises tax credit cap to $4,000. Total cost is $317 million over 10 years.
Carbon Capture and Sequestration:
- Gives $1.5 billion in extra investment tax credits for building low-emission coal plants, and $500 million extra for industrial coal gasification projects. Cost is $1.8 billion over 10 years.
- Extends excise tax of $1.10 per ton on coal sold from underground U.S. mines until 2017, which raises $842 million in revenue over 10 years. Surface mining operations would pay 55 cents per ton. Some producers could get refunds if they export the coal.
Clean Fuel Incentives:
- Gives new production tax credit up to $1.01 per gallon for producing motor fuel from nonfood cellulosic sources like woodchips and grass, ending by the end of 2013. Total cost is $482 million over 10 years.
- Reduces 51-cent-per-gallon tax credit for ethanol by 5 cents beginning with the first calendar year after the year in which 7.5 billion gallons of ethanol (including cellulosic ethanol) is produced. Total cost is $854 million over 10 years.
- Gives new $3,000 tax credit to buy "plug-in" hybrid vehicles that can run off batteries and gasoline engine. Total cost is $993 million over 10 years.
- Expands "New York Liberty Zone" tax credits to expand transportation infrastructure in New York. Total cost is $1.1 billion over 10 years.
Conservation and Energy Efficiency:
- Gives new tax credit bonds to "green" community programs to reduce greenhouse gases, limited at $3 billion. Total cost is $864 million over 10 years.
- Extends tax deductions for energy-efficient commercial buildings by five years through 2013. Total cost is $90 million over 10 years.
- Allows 7-year depreciation for companies that install remote-sensing devices to monitor real-time electricity use. Total cost is $1.2 billion over 10 years.