This is the main reason recent tax credit-driven solutions, such as the New Markets Tax Credit and the Renewable Energy Tax Credit have failed to stimulate the growth in the areas they have targeted.
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My question is in regards to the ITC and the PTC -- the investment tax credit and the production tax credit, renewable energy.
On top of the 30% federal tax credit, there are renewable certificates that solar-power owners can sell on a market that's similar to the carbon-emissions trading market.
One of the government incentives Mr. Reid supported for the renewable-energy industry was a 30% investment tax credit for companies in the solar-energy business.
For example, MMA Renewable Ventures and its investors enjoy a 30% tax credit, have the benefit of accelerated capital depreciation schedules, and sell solar energy credits generated by the project to NV Energy, which must obtain 20% of its power from renewable sources by 2015.
Currently, it offers a 30 percent tax credit for any business investing in solar energy and a renewable energy grant equal to that 30 percent to businesses purchasing solar power systems.
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But the thing that most people in the renewable energy sector will be watching is whether the wind energy tax credit is renewed before it expires at the end of the year.
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States are turning to more market based incentives as opposed to rebates, such as the Solar Renewable Energy Credits (SRECs), a cap and trade like credit granted to firms or individuals who have installed solar capacity, which can be sold on spot markets.
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Third, elimination of the credit would not absolve gasoline blenders from meeting the mandates required by the Renewable Fuel Standard (RFS).
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Von Hoene says that wind power generation will continue to grow even without the credit, adding that his company still supports tax credits for other types of renewable generation that have not yet matured.
Even if the federal tax credit for wind energy isn't renewed, there's still hope for renewable energy.
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Culver's looking for two big victories: a long-term tax credit for production of wind energy and a national mandate requiring utilities to use more renewable energy.
In most states, solar installations are driven by state renewable energy incentives that can be added to the federal 30% subsidy known as the investment tax credit.
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"It's hard to make business decisions in reliance on the credit when it's extended here and there over the years, " says Jones, who represents renewable industry players.
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