The U.S. Senate voted 62 to 36 Wednesday to pass a tax extension bill (H.R. 4213) that includes a key $1 biodiesel tax credit.

The expiration of the credit on Dec. 31, 2009 put the breaks on an expanding industry and raised questions about biodiesel’s future in the U.S.

With many biodiesel plants either idle or shutdown throughout the country, the bill will reinstate the credit retroactively, extending it through Dec. 31., 2010.

Although biodiesel received a tremendous boost under the new renewable fuel standard (RFS2), without a tax credit, the industry could not compete on price with petroleum-based diesel.

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When Congress returns from its summer vacation it will consider legislation that could energize investment in renewable energy projects with an almost “cash for clunkers”-like fervor.

Like the cash for clunkers legislation (and American Idol, and The Office), a feed-in tariff bill would be a ripoff of a European idea modified for American consumption. Bills that would require utilities to pay a premium for renewable power have been tried and failed here before, but the time (and composition of the Congress) may be right for the fight to take flight.

Introduced by Democratic Senators Jay Inslee (WA) and Bill Dellahunt (MA), the bill would guarantee a market for the renewable power projects and would do much to calms fears in today’s skittish investment arena. Feed-in tariffs have been overwhelmingly successful in Germany and Spain, basically creating the solar industries in both those countries.

Because a feed-in tariff promises American jobs and reduces foreign energy dependency, Congress will likely give the idea more of a fair hearing when the leaves begin to turn in DC.

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In a move that will surely provide an additional boost for the alternative energy industry, and perhaps T. Boone Pickens‘ plan, the US Department of Treasury has finally released guidelines for claiming the grants instead of the federal tax credit. Applications will be submitted online. However, the Treasury will not be accepting applications at this time.

The American Recovery and Reinvestment Act passed in February allowed for business taxpayers to apply for direct payments instead of claiming a tax credit on their income tax return. This applied to the credit under Internal Revenue Code (“IRC”) Section 45 (Energy Produced for Certain Renewable Resources) and IRC Section 48 (Energy Credit). Property that applies to this includes geothermal, biomass, micro wind turbines, and solar amongst others.

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There are all kinds of tax credits and other green incentives in the new economic stimulus bill.

But nonprofits are being left out of the mix. Such organizations are usually ineligible for federal tax incentives for renewable energy projects, according to folks from the National Development Council.

The council, one of the oldest national nonprofit community and economic development organizations in the U.S., aims to change that. The group has secured $1.5 million for a solar installation project at the Gasser Foundation’s base in Napa Valley, Calif.

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