September 19, 2008 / 7:15 PM / 11 years ago

Senate to vote next week on energy tax credits

WASHINGTON (Reuters) - The U.S. Senate is scheduled to vote next week, possibly as early as Tuesday, on legislation that would extend tax breaks for renewable energy production and energy-efficiency measures.

Negotiators hammered out the extensive tax package to continue investment credits for solar, wind, and geothermal energy. It also creates a new tax credit for purchasers of plug-in hybrid vehicles.

Under the bill, the tax credit for producing electricity from wind would be extended for one year and for two years for other renewable sources, such as wave and ocean tide projects that generate electricity.

Businesses would get a 30 percent tax credit for eight more years for investing in solar, wind, geothermal and ocean energy equipment.

Homeowners would also get a 30 percent tax credit for eight additional years for the cost of installing solar equipment at residences.

Homeowners could claim a tax credit of up to 10 percent of the costs of all qualified energy efficiency improvements, such as insulation, replacement windows, water heaters and heating and cooling equipment.

To reduce the demand for petroleum, the bill creates a tax credit for plug-in electric cars, with purchasers getting tax credits ranging from $2,500 to $7,500 depending on the battery capacity of the vehicle.

“This compromise will enable us to become a more energy efficient nation and wean us off our dependence on fossil fuels,” said Democrat Jeff Bingaman, chairman of the Senate Energy and Natural Resources Committee.

Reporting by Tom Doggett; Editing by Walter Bagley

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