US tax plan 'could jeopardize future clean energy development'

U.S. Senator Max Baucus, chairman of the U.S. Senate Committee on Finance, on Wednesday unveiled a draft tax plan aimed at simplifying the U.S. tax code and in the process consolidating or slashing scores of incentives that promote renewable energy and energy efficiency.

The proposal would cut the cost of the country’s current crop of diverse clean energy incentives by more than 50% over the next decade – or by more than $75 billion. In their place, the plan calls for the creation two clean-electricity and fuel schemes based on greenhouse gas levels that would be determined by the U.S. Environmental Protection Agency.

The draft tax plan favors electricity and fuel sources with low or no CO2 emissions such as nuclear power and natural gas plants.

Rhone Resch, president and CEO of the U.S. Solar Energy Industries Association (SEIA), expressed concern about the plan.

"While we appreciate efforts by Chairman Baucus to make the convoluted U.S. tax code simpler and fairer for everyone, we’re very concerned that reducing the solar Investment Tax Credit (ITC) and dramatically altering the way companies depreciate their assets could jeopardize future clean energy development in the United States."

Resch added that at a time when the U.S. was searching for creative ways to reduce carbon emissions, fight climate change and improve the country’s competitiveness, "the continued development of a strong, viable solar industry in the U.S. is critically important. Today, solar is one of the fastest-growing industries in America, employing 120,000 workers and generating more than 10.3 GW of clean electricity – enough to effectively power 1.7 million homes. And smart, effective policies, like the solar ITC, are helping to power record growth in the solar sector."

Resch added that the SEIA looked forward to "working with both the Senate and House to find common-sense ways to reform the tax code, while continuing to incentivize the kind of growth needed in America to ensure prosperity for future generations."