The U.S. Senate could vote as early as Thursday on a proposal to provide more than $17 billion in renewable-energy tax incentives.

Solar, wind and other renewable-energy investors and executives have been anxiously waiting for Congress to extend a set of investment tax credits that would offset 30 percent of the cost of asolarproject.

Both the Senate and the House of Representatives have tried and failed numerous times this year to extend the tax incentives, which are set to expire at the end of this year. The two sides of Congress have mainly disagreed about how to pay for them.

Some solar companies have said they wouldn't be able to build more U.S. power plants without the investment tax credits (see No Tax Credit, No Solar Power and PG&E to Buy 800MW from Optisolar, SunPower).

"If we passed the credits now, then we create a solar market in this country," said Rhone Resche, president of the Solar Energy Industries Association, during a press conference Thursday. "That can open up plant constructions in the southwest. In Arizona, a solar-thermal plant will use more steel than the Golden Gate Bridge."

If politicians want to encourage growth with these incentives, they will need to act quickly. Congress is scheduled to adjourn on Sept. 26.

The tax package the Senate is considering would amend a version that the House passed and sent to the Senate in May. In June, the Senate voted to stop the House bill, H.R. 6049, from advancing to the floor for a vote (see Senate Blocks Renewable Incentives Bill).

Meanwhile, the House approved another energy bill, H.R. 6899, on Tuesday that also would extend investment tax credits.

The new House bill proposes to pay for the tax credits by eliminating $18 billion in tax breaks for five large oil companies and requiring more royalties from companies drilling off the Gulf of Mexico using leases issued in late 1990s, the Associated Press reported. But even if the Senate approves H.R. 6899, a White House spokesperson said President Bush would likely veto it.  

Previous bills that called for the elimination of tax breaks for oil haven't made it through the Senate (see Senate Rejects Green Energy Incentives to Pass Energy Bill and Senate Sends Energy Bill Back to Beginning). The Senate deal wouldn't eliminate the tax breaks, but Republican leaders have agreed to freeze a tax break for oil and gas companies at the current rate, Grist reported.

The Senate bill would extend the investment tax credits for solar developments for eight years. Unlike the current tax-credit regulation, the Senate measure would allow utilities to take advantage of the incentives.

The Senate proposal also includes production tax credits for renewable-energy power plants that are already producing electricity. The legislation extends the production tax break by one year for wind and by two years for biomass and hydropower.

The proposal would allow for $800 million worth of bonds to pay for power plants using wind, biomass, geothermal, garbage and other sources. It also would set aside $1.5 billion in tax credits for carbon capture-and-storage projects.

Consumers would receive a $2,500 to $7,500 rebate for buying plug-in electric cars and trucks.

Consumers who want to install solar panels on their properties also would benefit from the bill, which extends investment tax credits for eight years and eliminates today's $2,000 cap on the credits, and it would allow small-wind equipment and geothermal heat pumps to take advantage of the credits.

Disagreement over offshore oil drilling could wreck the latest opportunity for Congress to extend the investment tax credits. The House and Senate bills both allow for more offshore drilling, but call for different limits on how far from the coast to allow the drilling and would allow different states to dig for oil.