By Jim Motavalli
10:10 AM EST, January 9, 2013
We're all happy that we didn't go over the fiscal cliff, even though we actually did for a little while. But most of the headlines ignored something Congress also did: It passed a series of worthwhile tax credits that had been dying on the vine.
For instance, the legislators finally extended the Production Tax Credit and Investment Tax Credit for wind energy. Of course, the extension is only for a year, but it's better than nothing. Wind farm developers were scrambling to get their projects operating by the end of 2012 because they had no idea if the highly lucrative credit was going to be renewed. According to Navigant, half the 70,000 wind jobs were hanging in the balance, waiting for Congress to act.
This is no way to operate a government. But, glory be, our legislators also extended the 50-cent-per-gallon-equivalent credit for compressed natural gas (CNG), liquefied natural gas (LNG) and one of my favorite candidates for powering the car of the future, propane. Again, it's only a one-year extension. Also renewed was the $30,000 credit for building CNG, LNG or propane stations (sorely needed).
This is a weird one. Congress fixed a gray area by extending tax credits for two-wheeled (motorcycles) and three-wheeled electric vehicles, with a maximum of 10 percent of the vehicle's cost or $2,500. To qualify, the vehicles need to have a 2.5-kilowatt-hour battery pack and be able to reach 45 mph. Electric motorcycles are reaching critical mass, and the same configuration might work great for what are essentially enclosed motorcycles reinvented as commuter cars.
One such low-cost vehicle is Lit Motors' two-wheeled C-1, which uses a gyroscope to stay vertical. Founder Danny Kim is a very convincing entrepreneur who's going to be opening champagne at his California HQ on hearing about the credit.
The legislative branch also extended and modified the cellulosic ethanol producer credit, with algae now treated as a "qualified feedstock." It's now technically "second-generation biofuel." There are also special allowances for cellulosic biofuel plant property.
The big one, of course, is the wind credit, with a "tax extender" provision that offers a 2.2-cent per kilowatt-hour credit for energy produced on turbine farms. As MIT's Technology Review points out, the credit is expected to cost $12.1 billion over 10 years, and President Obama is certain to sign it. Wind has been hosed by uncertainty, but it's a huge growth industry: 45 percent of the new electric generating capacity in 2012 came from wind.
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