Last week, the U.S. Senate blocked debate on the Energy Independence and Tax Relief Act of 2008. The bill is full of tax incentives for renewable energy sources totaling $17.7 billion. And, because the Senate blocked debate, the fate of clean-energy credits remains unknown.

The renewable energy community has been in limbo itself since that vote, trying to decide the ramifications of the renewable energy industry without clean energy credits. The question is simple: is renewable energy affordable without what amounts to a government subsidy? There are more interesting questions that should be on the table, however.

Can the government afford not to offer incentives to clean energy providers, like wind farms? It seems quite likely that they can’t:

• GE Energy Financial Services has released a study that shows that the wind farms built in the U.S. in 2007 (with the aid of the tax incentives that may shortly disappear) have a net present value benefit of $250 million to the U.S. Treasury. In other words, wind farms are putting more money in than they’re taking out.
• A whole list of renewable energy companies, such as SunPower,  have announce intentions to take their businesses abroad if clean energy credits become unavailable. Between the number of jobs lost and the taxes the government will lose out on, even just a few companies pulling out can have huge ramifications.
• Both presidential candidates, Sen. John McCain and Sen. Barack Obama, have announced plans to create new jobs by encouraging companies to create green collar opportunities. Without the sort of infrastructure that the Energy Independence Act offered, the winner will be hard-pressed to carry through their plans.

Looking at all of these issues associated with the ‘death’ of the Energy Independence Act, it seems likely that the act — or something very similar — will soon be resuscitated. There is certainly a question of whether politicians will realize the government’s need for renewable energy before the general election, but the number of candidates running on platforms of green collar jobs and inexpensive energy, the revitalization of renewable energy credits after November seems practically guaranteed.

Not all renewable energy businesses will be able to hold on until those credits are brought back, but there won’t be a bubble burst of tech stock proportions. Instead, a lack of tax incentives is an opportunity for renewable energy companies to prove their true cost effectiveness to consumers. That’s not really a hard sell as the cost of energy marches ever upward.

Photo — Warrenski