Could the election mean an end to energy tax credits?

Nothing is as constant as change. The 2010 midterm election could mean an end to tax credits that are designed to boost consumer demand for energy efficient heating, cooling, and renewable energy systems, some producers fear.

Fortune Magazine solicited viewpoints from several geothermal industry executives asking whether a change in government would be bad for business. Unstable funding environment could put the damper on new projects and reduce support from venture capitalists, according to the report.

The cusp of the consternation is whether all renewable energy sources will be lumped together as wasteful spending and support trimmed from the federal budget. Several cash strapped states have already begun to renege on tax credit payouts.

"A stable funding environment over a long period of time, like four or five years, is far better than these starts and stops,” Dan Kunz, CEO of US Geothermal, told Fortune.

Clearly, proposals will need to win bipartisan support with a split legislature. But the predominate players in each party have fundamental policy differences.

Senator Majority Leader Harry Reid is a long-term proponent of renewables – especially geothermal energy –, which benefits his home state of Nevada. Nevada has the second highest number of geothermal plants in the United States. Reid favors climate change legislation.

There is speculation among the pundit class that his House counterpart will be representative Joe Barton (R-TX), who is a leading contender for the chairmanship of the House Energy and Commerce Committee. Barton, a former oil executive, infamously stated that the federal government should apologize to BP in the midst of the spring 2010 oil spill on the Gulf Coast.

Barton drafted the Energy Policy Act of 2005 (EPACT), which invested billions to extend the renewable electricity production tax credit, encourage energy conservation and efficiency, and the construction of “clean coal” facilities.

Polar Opposites

Barton has also expressed skepticism toward climate change science, saying it is “uneven and evolving.” Accusations that scientists committed fraud in their research were rampant from Barton’s party in the build up to the election.

Barton’s position could put him at loggerheads with Senate democrats, as well as his chief rival for the chair, longtime Michigan congressperson Fred Upton.

Upton has affirmed his belief in climate change science, but opposed the legislation passed by the House in 2009 on the charge that it would harm the economy. Upton favors an energy mix including nuclear power and wind, according to the Washington Post.

It remains to be seen whether both parties can find common ground in a highly polarized Washington. There is talk that republicans may investigate climate scientists, there may be a battle over whether Congress will allow the EPA to regulate carbon.

If those reports are correct, compromise doesn’t seem likely, but I plan to determine what the overlapping interests are. I’ve already spoken with a leading Senate Democrat, and look forward to hearing from House Republicans.

This post was originally published on Smartplanet.com