President Barack Obama plans to use a $5.6 billion tax credit to encourage the production of renewable energy, a White House official said Tuesday.
The tax credit would help fuel the construction of new coal-fired power plants, nuclear plants and wind farms, the official said, declining to give more detail on the nature of the tax credits.
Obama will announce a number of new tax credits on Wednesday and Thursday, according to the official.
The new tax breaks will be distributed through a new tax reform commission chaired by former Democratic Sen. Jim Webb, the senior Democrat on the Senate Finance Committee.
A spokeswoman for Webb, Lauren Donovan, declined to comment on whether the president intends to announce any new tax incentives.
Webb was one of the first Democrats to endorse Obama in 2008, a position that he has maintained throughout his presidency.
The White House is also expected to announce additional stimulus measures, such as a $1.3 trillion package to pay for a highway bond that was approved by Congress last week.
The transportation bill includes $500 billion in infrastructure spending.
While the administration has yet to finalize the tax credit proposal, White House officials have signaled that the administration is considering it.
“The president is committed to creating jobs and rebuilding our economy,” Donovan said in a statement.
“His administration is working with Congress and the American people to bring our economic recovery to full health.
He is determined to move forward, and we look forward to working with him as we work to get our economy moving again.”
Obama is expected to unveil a new package of tax credits for renewable energy in the coming days.
The president has already announced tax incentives for wind and solar energy in his State of the Union address.
The Obama administration has been working to find ways to increase the supply of renewable power in the United States, which currently accounts for about 20 percent of the nation’s electricity production.
In recent years, the U.S. has experienced more than 20,000 megawatts of wind and sun power installed, according a recent study by the Solar Energy Industries Association.
The solar industry has been booming, and solar projects are expected to increase substantially as demand grows.
The industry has also expanded rapidly in recent years.
The tax credits will be the first of their kind in the U, according the official, who spoke on condition of anonymity to discuss the matter.
“This tax credit is the first time we’ve had a full program like this, and it’s a big deal for renewable and alternative energy, especially for solar,” said Jennifer Haskins, senior vice president of renewable portfolio standards at the Solar Institute.
“We need to make sure we get a good deal on this, especially since the market is booming right now.”
A bill introduced by Sen. Patrick Leahy, D-Vt., to provide a $2,000 credit to the renewable energy industry was defeated in Congress last year.
The bill would have provided a one-time payment of $1,000 to every U.N. climate change-related carbon credit.
Obama has said he wants to help American families with energy bills that are too high.
He has also suggested that his administration will look into ways to cut emissions and lower fuel prices in order to help lower energy bills.