Tax credits for the use and production of renewable energy could find their way back into the national energy bill being debated in the U.S. Congress.
According to Reuters, House leaders hope to vote this week on an energy bill that would repeal about $21 billion in tax breaks from oil and gas companies and put the money toward subsidies for renewables, includingsolarwind, biomass, geothermal, hydro, landfill gas and trash combustion.
Green-energy advocates were shocked earlier this month with news that the proposed tax credit for renewables could be cut from the bill, along with a standard that would require electric utilities to get 15 percent of their power from renewable sources (see Renewable Tax Credit and Portfolio Standard Could Get Cut From Energy Bill).
Those elements were included in the energy bill previously passed by the House, but were left out of the energy bill passed by the Senate. An informal congressional committee has been working to reconcile the vastly different energy bills in an attempt to put the bill up for a vote before the winter recess.
House Speaker Nancy Pelosi, D-Calif., announced plans to bring the bill to the floor this week and also said she wanted to re-include the renewable portfolio standard.
In addition, congressional Democrats have come to an agreement on a measure that would boost fuel-economy standards for vehicles to an average of 35 miles per gallon by 2020 (see US, UN Negotiate the Future of Greentech).
But even if the House approves all those greentech-friendly elements, there's no guarantee they will make it through the Senate and avoid a presidential veto.
The White House on Monday threatened to veto a bill that raises taxes, includes a renewable portfolio standard or fails to address a potential conflict between the National Highway Traffic Safety Administration and the Environmental Protection Agency related to fuel economy.
"There's no done deal here yet," said Ron Pernick, a principal at research firm Clean Edge, on Tuesday evening. "There was some enthusiasm here last week with the potential [Corporate Average Fuel Economy] standard and [Renewable Portfolio Standard], but Bush had threatened to veto some of those elements before. There's still quite a bit of a battle going on inside the Beltway."
If Congress members remove the fuel-economy standard, renewable portfolio standard and the tax credits, they would be removing all the critical components to the energy bill, as far as Pernick is concerned.
But in spite of carbon issues, spiraling energy costs and political pressure to sign the bill, Pernick said it wouldn't surprise him if President Bush vetoed it.
"He's not up for re-election," he said. "What can we possibly do at this point?"
In fact, Pernick said he'll be more surprised if the bill gets through intact and signed than if some greentech-friendly parts get cut out.
"The momentum is there at the state level and it's time for national action, but we may not see it until the next administration," Pernick said, pointing to 25 states -- along with the District of Columbia -- that already have set their own renewable portfolio standards, and three other states that have set voluntary goals (see map). "I hope we don't have to wait until 2009."
John Balbach, a managing partner at the Cleantech Venture Network, also said the veto threat is a sign that "policymakers appear to be considerably behind both consumer sentiment as well as sentiments by investors and entrepreneurs."
Still, investors didn't seem to be too discouraged by the uncertainty.
The WilderHill Clean Energy Index fell slightly to close at 245.07 points after opening at 245.93 and growing as high as 247.60 on Tuesday.
But plenty of companies also saw a boost, particularly solar stocks.
LDK Solar (NYSE: LDK), for example, jumped 26.8 percent to close at $40.97 per share Tuesday and kept growing in after-hour trading, reaching $41.60 per share by 8 p.m. Eastern.
That stock might not be the best example, though, because the shares may have benefited from other good news Tuesday.
Dow Jones reported the company secured $700 million in long-term debt and credit financing, as well as $100 million in customer prepayments, and ChangeWave Investing editor Tobin Smith recommended buying the stock at prices less than $35 per share.
Still, Canadian Solar (NSDQ: CSIQ) shares grew 15 percent to close at $18.70 per share Tuesday, Trina Solar (NYSE: TSL) grew 8.2 percent to $48.98 per share, Akeena Solar (NSDQ: AKNS) grew 6 percent to $6.14 per share and Evergreen Solar (NSDQ: ESLR) shares grew 3.7 percent to $13.26 per share.