Senate Energy & Natural Resources Chairman Jeff Bingaman (D-N.M.) and Sen. Olympia Snowe (R-Maine) teamed up on Wednesday to introduce legislation providing tax incentives to the energy sector, The Hill reports.

The bill, the Advanced Energy Tax Incentive Act of 2010, focuses on building and industrial energy efficiency, domestic manufacturing, emerging clean energy technologies and carbon mitigation, the Washington Independent Reports.

The legislation would enables home and business owners to defray upfront costs of investing in energy-saving technologies, including performance-based tax credits for whole home retrofits. It would make $2.5 billion in tax credits available to manufacturers dealing with clean renewable energy or enhanced energy efficiency products.

The measure would also establish a $1 billion tax credit program to enable domestic manufacturers to undertake energy-saving measures that advance their competitiveness, and facilitate the growth of renewable electricity by creating a tax incentive for energy storage systems.

The bill would also revamp the tax credit for carbon capture and storage, provide credits to promote off-shore wind production facilities and the development of domestic fuels derived from algae.

A summary of the bill outlines the various credits in detail (pdf).

Bingaman and Snow are urging the Senate to pass the bill before the end of the year.

In a statement, Bingaman said:

“We must continue to ensure that the Tax Code contains well-designed incentives that will help us transition to an energy efficient economy. Our bill will significantly expand domestic clean energy manufacturing; help American businesses and families reduce their energy use and dependence on fossil fuels; and create thousands of jobs. This is a common-sense, bipartisan proposal that deserves priority consideration.”

Source: Environmental Leader.