WASHINGTON (Reuters) – The Senate Finance Committee approved late on Tuesday some $31 billion in tax credits and financial incentives to boost alternative energy supplies

WASHINGTON (Reuters) – The Senate Finance Committee approved late on Tuesday some $31 billion in tax credits and financial incentives to boost alternative energy supplies and promote energy-savings steps as part of the Obama administration’s much bigger U.S. economic recovery plan.

The tax breaks would, in part, help wind power and solar energy companies that are having a difficult time getting financing because of tight credit conditions. The incentives also come at time that sharply lower petroleum prices have made alternative energy projects less cost-competitive.

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The Senate tax package includes most of the $20 billion in energy tax breaks cleared last week by the House Ways and Means Committee, but the Senate measure adds more incentives to help alternative energy companies.

Like the House’s legislation, the Senate measure would help the wind and solar energy industries, promote energy-efficiency improvements to existing homes and help service stations recoup their costs for installing alternative energy pumps.

“These incentives would create green jobs producing the next generation of renewable energy sources — wind, solar, geothermal,” said Sen. Max Baucus, who chairs the finance panel. “And they would help to combat climate change by reducing our use of carbon-emitting fuels.”

Both the Senate and House bills would extend by three years, to the end of 2012, the date that wind facilities would have to be in place to be eligible for the federal renewable energy production tax credit.

Other qualifying facilities that generate electricity from renewable energy sources, such as biomass, geothermal, small irrigation, hydropower, landfill gas and ocean currents, would also have an extra three years through the end of 2013 to be in service to get the same production tax credit.

With many renewable energy projects having a hard time getting financing, both the Senate and House plans would allow such facilities in place in 2009 and 2010 to temporarily claim a 30 percent investment tax credit instead of the production tax credit that is normally paid out over 10 years.

The Senate measure does more than the House to help alternative energy companies by allowing them to carry back their business credits from 2008 and 2009 for five years — instead of one year under present law — to offset their income taxes. The tax break would cost $11 billion over 10 years.

The panel rejected a Republican proposal to allow a 10-year carryback of business credits and to extend the renewable production tax credit for five years, which supporters said would have provided some certainty for wind projects.

The Senate bill would double the number of plug-in electric vehicles eligible for a purchaser’s tax credit to 500,000. The credit for most plug-in autos ranges from $2,500 to $7,500.

Other energy tax breaks and financial incentives in the Senate and House bills would:

* Increase the tax credit for service stations that install pumps that dispense alternative energy fuels like hydrogen, natural gas and gasoline made from 85 percent ethanol

* Give homeowners a tax credit equal to 30 percent (capped at $1,500) of the amount they paid for energy-efficient furnaces, hot water boilers and other energy savings improvements

* Authorize $1.6 billion in new clean renewable energy bonds to finance facilities that generate electricity from wind, biomass, geothermal, small irrigation, hydropower, landfill gas, ocean currents and trash burning facilities.

* Allow states to issue $2.4 billion in conservation tax credit bonds to finance loans and grants to individual homeowners to retrofit existing housing

* Provide individuals with a 30 percent uncapped tax credit for buying solar water heating property, small wind energy property and geothermal heat pumps

The Democratic-controlled Congress hopes to work out differences between the Senate and House economic stimulus bills and have a final package on Obama’s desk for his signature into law by the Presidents Day holiday on February 16.