It isn’t news that the US government has put the brakes on offshore E&P activities. What is news is that government ineptitude in enacting legislation is compromising alternative energy businesses as well. According to Matt Becker, leader of the Green Energy Tax Services practice at accounting firm BDO, uncertainty around pending legislation has compromised alternative energy industry initiatives. “The alternative energy industry is driven by start-up businesses creating a flow of new technology and developments that propel the industry forward,” Becker explained. “Pending legislation has brought this process to a halt, as a critical tax provision allowing companies to turn incentives into cash may expire at the end of this year.” According to Becker, there are two pieces of proposed legislation focused on green energy tax incentives. The first bill was offered in draft form by Representative Sander Levin (D-MI), and a second bill was released this week by Senator John Kerry (D-MA). “Both focus on extending a large set of incentives that already exist,” Becker said. The proposed legislation is particularly important because many of the incentives that were put in place in 2009 expire at the end of 2010. “Really what we’re looking at in these two bills is an extension to the 2011 and 2012 calendar years of a lot of the credits and incentives that were established in 2009,” he said. These credits provide incentive for tax payers who produce energy from alternative sources (solar, wind, geothermal, combined heat and power machinery) as well as those tax payers that produce equipment for creating energy from alternative sources. “These pieces of legislation are imperative to the alternative energy industry,” Becker said, primarily because they allow companies that are not in a position to benefit from tax credits (for example, start-up companies that haven’t made sufficient profit to pay taxes) to apply for a grant in lieu of a tax credit. The grant allows companies to convert the tax credit to cash immediately. That incentive is set to expire at the end of 2010, but extending it to 2011 or 2012 would be enormously helpful to these companies. Right now, it is touch-and-go with the legislation. If it stands, credits and incentives will expire at year-end. Extending the benefits could make or break budding alternative energy initiatives, Becker said. So what course of action is open to companies awaiting the outcome of this legislation? Becker’s advice is to take action. “Alternative energy companies should help their senators and representatives understand how critical that provision is to future investment by the industry.” For news and resources on this subject or more information about BDO, visit the BDO website.