Kaine unveils green-jobs, tax credit plan

10:50 a.m.

Updated information from a Governor's Office news release:

VIRGINIA BEACH – Governor Timothy M. Kaine today proposed several pieces of legislation designed to promote green jobs as part of his “Renew Virginia” initiative. Governor Kaine made his announcement from the headquarters of Solar Services Inc., a Virginia Beach company that installs solar panels.

“Creating green jobs and a renewable energy sector of the Virginia economy is one way we can create opportunity from our current economic challenges,” Governor Kaine said. “With this package of bills, not only will we be able to create jobs for hardworking Virginians, but we will be taking proactive steps to reduce our reliance on foreign oil and improve our environment.”

The Governor’s legislative proposals include:

Clean Energy Manufacturing Incentive

This bill will expand the existing incentive grant available to solar photovoltaic manufacturers to include manufacturing of other low and no-carbon energy sources. The grants will be available to new and expanding businesses producing goods and equipment for energy efficiency, as well as solar, biomass, wind, nuclear, and other clean energy sources.

The incentive grant will be a valuable tool to the Interagency Task Force for Energy Project Recruitment, which was announced in December and provides a necessary tool to bring green jobs to Virginia. The size of the grants will be based on the economic return to the Commonwealth from the new business activity.

These also will be performance grants so that the Commonwealth will already have received the benefits of the investments before providing state incentives -- a unique partnership between government and private businesses.

To prime this effort and help to support Virginia’s commitment to green jobs, $2 million is included for this program in the introduced budget.

Biofuels Incentive Grant

This bill will modify the existing financial support given to biofuel producers to provide a higher level of support for biofuels produced from sources that are not also used for food. The bill will provide a 10-cents-per-gallon incentive for biofuels produced from these sources. Biofuels produced from food crops would receive a lesser amount, 7.5-cents-per-gallon.

The bill will also reduce the minimum threshold required to be eligible for the grant from two million gallons per year to one million gallons per year. This will encourage the development of a network of biofuels producers across Virginia's farming communities and provide new economic development opportunities in rural areas.

Renewable Energy System Income Tax Credits

This bill establishes Renewable Energy System Income Tax Credits.

This will be an income tax credit for individuals and corporations installing solar photovoltaic, solar thermal, and small wind systems.

The credits vary based on the size of the systems installed: individuals can receive up to $8,000 for solar photovoltaic, $4,000 for solar thermal, and $6,000 for wind-power electric generators. Corporations can receive up to $20,000 for solar photovoltaic, $10,000 for solar thermal, and $15,000 for wind-powered electric generators. The total tax credits available for all individual and corporate taxpayers would be capped at $1 million total per year for residential taxpayers and $1 million total per year for corporate taxpayers.

This proposal balances the need to provide incentives with the need to be careful with financial commitments in the state budget. This takes the first steps towards building a long-term marketplace for renewable energy in Virginia.

Renewable Energy Equipment Sales Tax Exemption

This bill exempts, year round, solar photovoltaic and thermal systems as well as small wind systems from payment of sales tax. This also will provide savings to these companies' consumers, lowering their costs to install the systems.

Standing with Governor Kaine to emphasize the important role green jobs will play in Virginia’s future economy were Senator Creigh Deeds of Bath County; Skip Stiles, Executive Director of Wetlands Watch and a member of the Governor’s Commission on Climate Change; Richard Good, owner of Solar Services Inc.; and leaders from the environmental and energy communities.

“What Governor Kaine has done, and what we need to continue doing in the coming years, is to put together a state strategy for bringing green jobs and the energy research of the future right here to Virginia,” Senator Deeds said.

"These bills, and the rest of Governor Kaine's Renew Virginia initiative, start us moving toward the energy generation technologies of the next century, away from the environmental consequences of this century's technologies, and will grow new green jobs and businesses in the process,” Stiles said. “They hit the trifecta of energy, environmental, and economic needs we face in Virginia."

Renew Virginia is Governor Kaine's year-long initiative to promote renewable energy, green jobs, and environmental protection. For more information on Renew Virginia, visit www.governor.virginia.gov/Initiatives/RenewVirginia

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6:46 a.m.

(AP) - Gov. Timothy M. Kaine will call today for state tax incentives and grants to promote environmentally friendly businesses and jobs.

Kaine will lay out his proposals, which require General Assembly approval, this morning in Virginia Beach, according to sources who requested anonymity because Kaine had not released the plan.

Kaine will propose, according to the sources:

~Creating a tax credit for those who install green energy systems, such as solar power. The credit could reach $20,000 for a business and would be less than $8,000 for an individual.
~Making purchases of home energy systems such as solar cells and some windmills exempt from the state's 5 percent sales tax.
~Providing state grants to makers of renewable-power equipment such as that used to tap wind or geothermal energy. (Geothermal energy relies on underground temperatures to heat or cool buildings.) This would expand eligibility for a little-used program that currently offers up to $18 million over six years for manufacturers of solar-power equipment. The proposals add detail to Kaine's Renew Virginia plan, which he launched in mid-December. The program aims to protect the environment and create so-called "green jobs."

"Virginia has the potential to create tens of thousands of green jobs by 2025," Kaine said then.

Kenneth P. Green, a scholar at the American Enterprise Institute, a Washington think tank, believes it's unwise to use tax money to promote green jobs.

That money would be better spent -- and would create more jobs overall -- if left in the pockets of people and businesses, Green said.

"I'd call [green jobs] more of a fad than a good thing," Green said.

Cale Jaffe, a lawyer for the Southern Environmental Law Center, a conservation group, said he was not aware of Kaine's latest proposals but generally supported the push for green jobs.

Jaffe said he particularly supported efforts to make homes and businesses more energy-efficient because that reduces emissions, linked to global warming, from coal-burning power plants.

Kaine officials have said they also consider nuclear power plants to be green, since they don't release greenhouse gases.

But Green and Jaffe said they don't call nuclear power green, largely because the plants create long-lasting radioactive waste.

"It really depends on how you define green jobs," Jaffe said.