Renewable Tax Incentives face dim future

NEW YORK (CNNMoney.com) -- After years of rapid growth and darling status among many in Washington, the future of the American renewable energy industry is uncertain. That's because the government cash it has come to rely on may dry up on Dec. 31.

Before the Great Recession, renewable energy developments were helped by a tax credit, worth generally 30% of the cost of the project. When the recession hit, the stimulus package replaced those tax credits with direct cash grants of similar value. Cash is considered more beneficial than credit to the industry.

So far, the government has handed out about $5.4 billion, according to the Energy Department. Congress could vote to extend the grants, but that's highly unlikely. If they're allowed to expire, incentives for renewable energy will revert to the old tax credits.

"This is not a great place to be in," said Denise Bode, head of the American Wind Energy Association. "It's an economic opportunity that will be missed." The wind industry is already hurting -- even with the cash.

The amount of new electricity wind can generate declined 72% in the third quarter compared to the same time last year, according to the wind association.

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