This post is by ClimateProgress guest blogger Bill Becker, executive director of the Presidential Climate Action Project.
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The energy bill passed by Congress last December originally contained a beneficial, if temporary, set of financial incentives to spur the growth of renewable energy technologies in the United States.
The bill included a renewable energy portfolio standard (RPS) that would require states to acquire part of their electric power from renewable resources. The RPS would have guaranteed a market for these technologies -- one of the ways to help a new industry establish a foothold in the economy.
The energy bill also contained an extension of the Production Tax Credit (PTC) -- a tax break for emerging renewable energy industries that Congress has a history of approving for only a year or two at a time. (See "The subsidy tease, part I".)
The PTC and a package of other clean-energy incentives would have been funded by taking back about $12 billion in tax breaks from the oil industry. The trade-off was sensible not only because the oil industry doesn't need the money, but because in some small symbolic measure, the repeal would have helped level the playing field for those young renewable energy industries trying to compete against oil, gas, and coal industries that have been fattened for generations by the nation's taxpayers.
When the White House yelled "Tax increase!" and threatened to veto the energy bill, Congress backed off.
As a result, many of the energy efficiency incentives contained in the Energy Policy Act of 2005 died on December 31, and others will expire in a few months. They include incentives for efficiency in commercial buildings; tax credits for installing efficient furnaces, air conditioners, water heaters, windows, and other improvements in existing homes; incentives for manufacturers to make high-efficiency refrigerators, dishwashers, and washing machines; the tax credit for residential solar system installations; and a tax credit for plug-in hybrid vehicles.