Mr. President, today I am introducing two bills that will help drive the renewable energy revolution that is currently underway in our rural communities. The Rural Community Renewable Energy Bonds…
Mr. President, today I am introducing two bills that will help drive the renewable energy revolution that is currently underway in our rural communities. The Rural Community Renewable Energy Bonds Act, which I am introducing with Senator Smith, and the Rural Wind Energy Development Act, which I am introducing with Senators Smith, Dorgan and Craig, will help spur much needed private investment in renewable energy infrastructure in rural areas.
I have spoken countless times about the great possibilities that rural America holds for our Nation's energy future. I have also expressed my alarm at how our rising dependence on foreign oil is undermining our security and our interests around the world.
How do we build a more energy secure economy--one that is less vulnerable to wild swings in oil prices, political instability, and supply disruptions? Unfortunately, we don't have the resources in this country to drill our way to energy independence. We do, however, have the most productive lands in the world, and the most productive farmers, ranchers, engineers and entrepreneurs in the world. If we give them the right tools, they can build a new, clean energy economy that will rely heavily on biofuels, wind power, solar energy, and alternative sources.
If you spend time in places like Prowers County or Alamosa County, you see that a clean energy revolution is already underway in our heartland. In these rural communities, like so many across the country, people are banding together to build small biofuels plants, solar farms, and wind turbines. These projects are already underway, and they are the seeds for a full-blown clean energy revolution in rural America.
The farmers, ranchers, and entrepreneurs who are behind these projects want to be a part of the solution to our Nation's energy challenges. They also understand that home-grown energy can revitalize the Main Streets that have been boarded up in the last few years.
The bills I am introducing today provide tools that rural communities can use to build a renewable energy economy.
The first bill, the Renewable Energy Bonds Act, provides incentives for investment in wind and other renewable energy projects by giving private developers access to tax-exempt bond markets.
Currently, the Federal tax code only allows municipal and public entities access to tax-exempt bond markets for wind and other renewable energy projects. Private developers, who are more likely to invest in smaller projects and who are currently responsible for nearly 75 percent of current renewable energy development, are not eligible to use these federally tax-exempt bonds.
This is unfortunate because these are the same small developers who don't benefit much from the production tax credit, as their Federal tax liabilities usually aren't big enough to reap the tax credit's benefits.
Renewable energy bonds make sense for these small developers and, because they cost the Federal Government less than the production tax credit, they also make sense from a fiscal perspective. This bill may actually save the Government money.
The second bill I am introducing, the Rural Wind Energy Development Act, would extend the production tax credit to include small wind systems. We have made great strides in wind development over the last few years, as evidenced by wind energy's growing availability to Colorado consumers.
The trouble is that the existing production tax credit only benefits larger producers that want to build wind farms with million-dollar turbines. Small businesses, towns, farms, and families aren't given the same incentive to produce their own renewable power from smaller, more affordable turbines.
This is unfortunate because the National Renewable Energy Lab in Golden, Colorado, and others are making great strides in the development of small wind systems that can be installed on homes and businesses. The system now available costs around $50,000 for 10kW of capacity.
That's a steep investment for any family or any business. But our bill, by providing a tax incentive for their purchase, would not only reduce the cost, but it would create more market certainty for manufacturers of small wind systems. With more systems in production, costs will fall further and small wind will be a real option for more people.
The bill is simple: it creates a five year tax credit of $1500 per half-kW. There is no cap for the purchase and installation of small wind systems, so long as they are smaller than 100kW. It will put more small wind systems on the market and it will give consumers more choices of how to power their homes and businesses.
I'm proud to introduce these bills with my colleagues because they represent two more building blocks for a new, clean energy economy and because they will help revitalize a rural America that has been forgotten for too long.
I hope we can move these straightforward, bipartisan solutions through as quickly as possible.