WASHINGTON — The enhanced federal tax cut package expected to be voted on next week could include a windfall for Cape Wind and other renewable energy projects around the country.
The bill, released Thursday night in the Senate and widely distributed yesterday, extends a renewable energy credit worth up to 30 percent of a new project’s cost. The credit, introduced in 2009 as part of the Obama administration’s stimulus bill, originally applied only to projects under construction by the end of this year.
The tax deal before the Senate includes projects under construction by the end of 2011.
Cape Wind is expected to begin building 130 turbines in Nantucket Sound next year. The company had been racing to meet the original deadline, but delays in two federal permits, among other issues, forced developers to acknowledge several weeks ago they would not make it.
Project officials said yesterday it is too early to determine whether it would be eligible for — or if they would take advantage of — the grant or other federal financial incentives.
“If Cape Wind is eligible for this program, it will help us secure project finance in what remains a very challenging global financial market and allow us to move forward creating over a thousand jobs in Massachusetts and kick-start the US offshore wind industry,’’ the company said yesterday in a statement.
The tax credit program would cost about $1.3 billion to extend for a year, according to the Senate Finance Committee, a cost that drew criticism yesterday.
“This is another example of a temporary program becoming potentially permanent,’’ said Robert Rio, senior vice president for Associated Industries of Massachusetts, a trade group. “Although the program may have some good intentions, with all the potential wind development in the pipeline the cost of this program needs to be monitored or limited.’’
The group has criticized the Cape Wind project because its electricity would be twice as expensive as that currently produced by fossil fuels. It is appealing a recent state Department of Public Utilities decision to approve a contract for National Grid to purchase 50 percent of Cape Wind’s energy. The appeal contends that, among other lapses, the state did not consider less expensive renewable energy projects.
Cape Wind has not said how much it will cost to build the project, but estimates by the state attorney general and others have placed it at greater than $2.5 billion. While Cape Wind was eligible for other tax incentives, the cash grant is widely seen as the most attractive because it would draw investors to finance the project. Cape Wind officials said yesterday they were evaluating their options.
Renewable energy projects eligible for the credit include those involving wind, solar, geothermal, and biomass — the generation of electricity by burning wood or other plant mass. Read more here.