Muckraker: Grist on PoliticsThe Senate once again failed to pass tax-credit extensions for renewable energy on Tuesday, and folks in the industry are starting to get worried. Companies working in wind, solar, and other renewables rely on the tax credits, which are set to expire at the end of the year.

Trade organizations that represent renewable-energy firms on the Hill say they’re already seeing a slowing of growth in the sector because companies are hesitant to start new projects without the assurance that these credits will be available.

“We’re hearing about companies who are putting off all decisions to expand in the U.S. until they can get the stability to go forward,” said Aaron Severn, legislative manager for the American Wind Energy Association (AWEA).

There have already been multiple attempts to get these credits passed. A sticking point is that conservative “Blue Dog” Democrats want to ensure that the measure includes a “pay-for” — a provision that would either cut spending or shift taxes to fund the credits. Republicans argue that a pay-for isn’t necessary.

Previous versions of the bill would have funded the credits by revoking tax breaks for the oil and gas industry — not a popular strategy with many Senate Republicans. The version that failed on Tuesday would have paid for the credits by closing what Democrats call tax “loopholes” for hedge funds and multinational corporations — also not popular with many Senate Republicans.

The Senate might get another chance to vote on the credits this month; there’s talk of lumping the tax extensions into a pending mortgage-foreclosure bill. If the tax credits don’t pass this summer, a one-year extension could be passed in the fall to prevent the credits from expiring.

But in order to accomplish anything, Senate Democrats and Republicans are going to have to work out a compromise. Said Severn, “Until you can see a way to bring these guys together to start talking about this, I don’t really see a path forward.”

More than 116,000 U.S. jobs and nearly $19 billion in investment could be lost in just one year if the credits are not renewed, according to a recent report [PDF] by AWEA and the Solar Energy Research and Education Foundation. Severn warns that a sharp decline in the amount of installed wind-energy capacity could result. In previous years when the production tax credit has been allowed to expire, there’s been a 70 to 90 percent decrease in the amount of wind capacity installed, he says. One German wind company, Enercon, recently told the press that the instability of the production tax credit is precisely the reason it hasn’t expanded into the United States.

Monique Hanis, spokesperson for the Solar Energy Industries Association, cited one solar energy company based in California, Akeena Solar, that recently cut 8 percent of its employees because of uncertainty about the future of investment in the industry.

“In the long term what it means is that the U.S. is going to give up its leadership position in the technology,” said Hanis. “We’re going to give up this potential green tech sector, which right now is a really high-growth sector with the potential for tens of thousands of jobs.”