US bailout bill includes tax breaks on renewables

A US$700 billion dollar rescue plan for the United States economy, approved by the Senate on Wednesday and awaiting further action in the House of Representatives, includes tax credits for the solar, wind and biodiesel industries, Reuters reports.

The legislation extends the tax credit for wind energy for one year and allows an eight-year extension for investment tax credits for solar energy projects. Tax credits ranging from US$2,500 to $7,500 would be provided to buyers of electric cars.

The bill also provided tax breaks for biodiesel, despite critics’ warnings that the subsidy provides a loophole for companies to mix foreign biofuels with US biodiesel to receive the US subsidy, only to sell the fuel at a discount to European markets.

The president of the Solar Energy Industries Association, Rhone Reschthat, estimated that tax credits contained in a bailout package could create 440,000 permanent jobs and add US$325 billion in private investment in the US solar energy sector. A bailout proposal is currently being debated in the House of Representatives.

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