THE WHITE HOUSE
Office of the Press Secretary
|For Immediate Release || || February 3, 2000 |
Climate Change Technology Initiative:
$4.0 Billion in Tax Incentives
The President is proposing a new $4.0 billion package in tax incentives over five years to help reduce greenhouse gas emissions by spurring the purchase of energy efficient products and the use of renewable energy (see Table 2).
|Table 2. CCTI Tax Incentives ($ in Millions) ||Revenue Effect |
| ||FY 2001 ||Total FY01-05 |
|Homes and Buildings || || |
|Provide tax credit for energy efficient building equipment ||-18 ||-201 |
|Provide tax credit for new energy efficient homes ||- 82 ||-633 |
|Provide tax credit for solar energy systems ||-9 ||-132 |
|Vehicles || || |
|Extend tax credit for electric and fuel cell vehicles and provide tax credits for qualified hybrid vehicles ||0 ||-2078 |
|Clean Energy || || |
|Extend tax credit for electricity produced from wind and closed- loop biomass; provide credits for open-loop biomass facilities and coal-biomass cofiring; and provide credits for methane from certain landfills ||-91 ||-976 |
|Industry || || |
|Provide 15-year recovery period for distributed power property ||-1 ||-10 |
|TOTAL** ||-201 ||-4030 |
|**Total may not add due to rounding. || || |
HOMES AND BUILDINGS
- Tax credit to consumers who purchase new energy efficient homes. To encourage the purchase of new energy efficient homes, consumers would receive a tax credit of $1,000 for homes purchased from 2001-2003 that use at least 30 percent less energy than the standard under the 1998 International Energy Conservation Code (IECC) and a credit of $2,000 for homes purchased from 2001-2005 that use at least 50 percent less energy than the IECC standard.
- Tax credit for energy efficient equipment in new and existing homes or buildings. This credit will encourage the purchase of electric heat pump water heaters, natural gas heat pumps and fuel cells. The credit would apply to both residential and commercial equipment. The credit would be 20 percent of the cost of the investment, subject to a cap, for equipment purchased from 2001-2004.
- Tax credit for solar energy systems. A 15 percent tax credit will encourage the purchase by consumers and businesses of solar energy systems. The maximum credit would be $2,000 for rooftop photovoltaic systems placed in service from 2001-2007 and $1,000 for solar water heating systems placed in service from 2001-2005.
- Tax credits for electric, fuel cell, and qualified hybrid vehicles. Cars and light trucks (including minivans, sport utilities, and pickups) currently account for 20 percent of greenhouse gas emissions. Tax credits for electric, fuel cell, and hybrid vehicles will help to move advanced technologies from the laboratory to the highway. These technologies can significantly reduce emissions of carbon dioxide, the most prevalent greenhouse gas.
--Extend the current tax credit for electric vehicles and fuel cell vehicles. Under current law, a 10 percent credit, up to $4,000, is provided for the cost of qualified electric vehicles and fuel cell vehicles. The credit begins to phase down in 2002 and phases out in 2005. The Presidents proposal would extend the tax credit at its $4,000 maximum level through 2006.
--Tax credits for hybrid vehicles. The credit -- available for all qualifying vehicles, including cars, minivans, sport utility vehicles, and pickup trucks -- would range from $500 to $3,000 for purchases of a qualified hybrid vehicle from 2003 through 2006, depending upon the vehicles design performance.
- Tax credit for electricity produced from wind. Current law encourages the production of electricity from wind, which emits no greenhouse gases, through a tax credit of 1.5 cents per kilowatt hour (adjusted for inflation after 1992). The current tax credit covers facilities placed in service before January 1, 2002. The President proposes a 2.5-year extension of this tax credit.
- Tax credits for electricity produced from biomass. Biomass refers to trees, crops and agricultural wastes used to produce power, fuels or chemicals. This package of credits would:
--Extend current closed-loop biomass credit. This proposal extends for 2.5 years the current 1.5 cent per kilowatt hour tax credit (adjusted for inflation after 1992), which covers facilities placed in service before January 1, 2002.
--Provide credits for open loop biomass facilities. This proposal expands the definition of biomass eligible for the 1.5 cent tax credit to include certain forest-related resources and agricultural and other sources for facilities placed in service from 2001 through 2005, and provides a 1.0 cent credit for electricity produced from 2001 through 2003 from facilities placed in service prior to January 1, 2001.
-- Provide a credit for cofiring biomass and coal. This proposal adds a 0.5 cent per kilowatt hour tax credit for electricity produced by cofiring biomass in coal plants from 2001 through 2005.
-- Provide credit for methane from landfills. This proposal adds a 1.5 cent per kilowatt hour credit for electricity produced from landfills not subject to EPAs 1996 New Source Performance Standards/Emissions Guidelines (NSPS/EG) and 1.0 cent per kilowatt hour for landfills subject to NSPS/EG. Qualified facilities would be facilities placed in service after December 31, 2000 and before January 1, 2006.
- 15-year recovery period for distributed power property. The development of distributed power technologies has made it possible to generate electricity locally at dispersed industrial, commercial, and residential locations. Such technologies can be more energy efficient and generate fewer greenhouse gases than conventional generation methods. This proposal would simplify and rationalize the current depreciation system by assigning a single 15-year recovery period to distributed power property.