White House Budget Emphasizes Incentives, Cuts Research

FY 2002 Budget proposal in brief.

Published: 11-Apr-2001

> The Bush administration released its detailed budget proposal on Monday for fiscal year 2002, which begins October 1, 2001. In terms of renewable energy and energy efficiency, the budget proposes expanded tax credits for renewable energy but cuts funding for most renewable energy and energy efficiency research and development. The President's budget is meant to serve as a starting point for Congressional budget negotiations.

The budget proposes allowing homeowners to receive a solar energy investment tax credit that is currently applicable only to businesses. The credit would apply to solar electric and hot water systems, excluding swimming pool heaters, and would be equal to 15 percent of the cost of equipment and installation, with a maximum of $2,000 for each type of system. The budget also proposes expanding the existing production tax credit, which currently applies to wind power plants, biomass power plants supplied by dedicated energy crops, and energy from poultry waste. Due to expire at the end of this year, the credit would be extended through 2004, and would be expanded to include more biomass power facilities. Co-firing of coal with biomass would be eligible for a limited credit, also. See the "Tax Incentives" section near the end of the Energy budget on the White House Web site at: .

The White House budget also proposes cuts of 25.9 percent in renewable energy research, development, and deployment. In preparation for closing out research in concentrating solar power, its budget is reduced by 85.9 percent. Research funding for geothermal energy, photovoltaic systems, solar building technologies, and wind energy systems are all cut by roughly 48 percent. Last- minute budget changes held funding steady for hydrogen, hydropower, biomass and biofuels energy systems, and electric energy systems and storage.

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