[Congressional Record (Bound Edition), Volume 147 (2001), Part 8]
[Extensions of Remarks]
[Page 10891]
[From the U.S. Government Publishing Office, www.gpo.gov]


[[Page 10891]]

      INTRODUCTION OF THE RENEWABLE ENERGY ACT FOR CREDIT ON TAXES

                                 ______
                                 

                            HON. SUSAN DAVIS

                             of california

                    in the house of representatives

                        Thursday, June 14, 2001

  Mrs. DAVIS of California. Mr. Speaker, I would invite you to join me 
as a co-sponsor of the Renewable Energy Act for Credit on Taxes.
  This is a refundable tax credit to be given for investments in 
renewable energy systems based on solar, wind, or fuel cells providing 
up to $4.50 per Watt of electricity produced, capped at the lesser of 
35 percent of the cost of the system or $6,000 for residences and 
$50,000 for commercial enterprises. It would sunset in four years.
  A recent ABC poll showed that 90 percent of the public support 
increased investment in renewable energy sources. In its National 
Energy Policy, the administration has also identified this need.
  Based on the California experience, we need to supply more energy at 
peak periods as soon as possible. Because of transmission gridlock both 
between states in the western region and within California, right now 
we need to increase supplies where they will be used. Public policy 
calls for increasing reliance on renewable energy sources.
  Therefore, we need to give incentives to power sources that can be 
put into operation relatively quickly, produce power at peak times 
where it will be used, and be powered by renewable energy sources.
  The administration's National Energy Policy states, ``Photovoltaic 
solar distributed energy is a particularly valuable energy generation 
source during times of peak use of power.'' [p. 6-10]
  Under-used locations for increased production of power are homes and 
businesses. Owners have not invested in personal energy systems in part 
because they have not provided a reasonable return on the investment. 
This gap can be bridged by using tax incentives to motivate additional 
private investment in power. The benefit is a long-term contribution to 
power supply that does not require continued cost for fuel.
  Solar power for water heating has been used extensively in the West 
over many years because it has been a good investment. It demonstrates 
the willingness of owners to make this investment when it is 
financially viable.
  Newer materials and more reliable systems have become available to 
make individual photovoltaic systems attractive as well. In April a 
solar demonstration home was built on the Washington Mall that not only 
incorporated many energy saving designs but also employed a solar 
energy system with back-up batteries. The additional cost for the solar 
system for this large, three-bedroom, two story home was given as 
$30,000.
  Is a federal tax credit enough to encourage a homeowner to make this 
investment? Under my bill the owner would qualify for $18,000 of the 
cost based on the amount of power produced; however, the proposed cap 
would be the lesser of 35 percent of the cost or $6,000, leaving 
$24,000 of uncovered cost.
  While this might not be a sufficient incentive for many owners, some 
14 states as well as about 26 municipalities have additional rebates. 
California, for example, has a rebate program capped at 50 percent of 
the cost. In this case, the California homeowner combining the two 
programs would be paying only $9,000 of that cost.
  Without a rebate, a homeowner could buy a system of half the capacity 
receiving a lower rebate but still have a $9,750 net cost under this 
bill.
  The advantage of a solar solution is that in many locations the solar 
energy is most available when it is most needed--in the summer in the 
middle of the day.
  In other areas wind systems are viable with applications that look 
like a typical roof top vent suitable for residences and businesses. 
While there is a current production tax credit for wind energy, it is 
not an attractive financial incentive for individuals since the owner 
is using the product not selling it. Thus, a tax credit is the 
appropriate mechanism.
  I have chosen a refundable tax credit rather than a grant program as 
less bureaucratic and readily accessible to a taxpayer. The sunset will 
give incentives to immediately increase supplies.
  I believe it is time to take a large stride toward investing in 
renewable energy that will continue to produce power for many years 
without needing to purchase fossil fuels. We can have more clean power 
where we need it at peak periods.

                          ____________________