According to the Renewable Energy Task Force, South Denver Chamber of Commerce, the Renewable Energy 401(k) Tax Credit would require the federal government to provide a tax credit ranging from $40 to $400 dollars per employee to businesses that add a renewable energy fund to 401(k) plans. According to a press release, small businesses will receive a higher per employee tax credit; corporations will receive a smaller per employee tax credit but a larger overall tax credit.
The coalition says that, at a cost of $7 to $8 billion dollars, the proposed tax credit could generate $30 to $100 billion of renewable energy investment, along with 500,000 or more clean energy jobs.
“It’s time to help Americans get back to work by investing in renewable energy production,”says Beth Hart, President of Colorado Solar Energy Industries Association (COSEIA). “For the 50 million employees who participate in 401(k) plans, we need to make it easy to invest in renewable energy.”
The groups say that the Renewable Energy 401(k) Tax Credit provides a financial incentive for businesses to add a renewable energy fund to employee 401(k) plans and covers the minor administration cost of a fund addition. Moreover, the groups say that, because it is a refundable tax credit, businesses operating at a loss receive a one time tax refund. Profitable businesses receive a tax credit that lowers the amount of tax they pay.
The Renewable Energy 401(k) Tax Credit will prompt the growth of existing renewable energy mutual funds thereby increasing renewable energy production. The tax credit will also stimulate the creation of new renewable energy project financing funds suitable for 401(k) investment plans, according to the groups.
The press release notes that Renewable Energy Mutual Funds hold shares of typically 20-100 renewable energy production companies, for example Calvert and Guinness Atkinson alternative energy funds. The group notes that currently renewable energy project financing funds are available to large institutional investors, and that, as investment in renewable energy grows, financial markets will create renewable energy project financing funds that are accessible to individual 401(k) plan investors.
Renewable Energy Project Financing Funds provide project financing for bundles of new wind farms, concentrated solar power plants and large scale installation of solar panels on commercial buildings, factories and schools.
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