(Adds House may add drilling proposal to spending bill, 12th paragraph) By Tom Doggett WASHINGTON, Sept 22 (Reuters) - The U.S. Senate will vote on Tuesday on legislation to extend tax breaks for using renewable energy sources and taking steps to save energy. The energy tax breaks will be part of a bigger bill that continues other tax credits for businesses and also includes a one-year fix to the Alternative Minimum Tax so millions of Americans won't be subject to higher income taxes. Under the bill, the tax credit for producing electricity from wind would be extended for one year. The credit for other renewable sources, such as wave and ocean tide projects that generate electricity, would be extended for two years. Businesses would get a 30 percent tax credit for eight more years for investing in solar, wind, geothermal and ocean energy equipment. Homeowners would also get a 30 percent tax credit for eight additional years for the cost of installing solar equipment at their residences. Homeowners could claim a tax credit of up to 10 percent of the cost of all qualified energy efficiency improvements, such as insulation, replacement windows, water heaters and heating and cooling equipment. To reduce the demand for petroleum, the bill creates a tax credit for plug-in electric cars, with purchasers getting tax credits ranging from $2,500 to $7,500, depending on the battery capacity of the vehicle. While environmentalists welcome the energy savings provisions in the bill, they oppose language that would allow oil companies to quickly write off the cost for expanding their refineries, particularly those that refine oil from shale and tar sands. Green groups said finding oil from shale and tar sands in the West would use vast amounts of rare water supplies and pollute the land. Meanwhile, a group of Senate Republican and Democratic lawmakers said they would delay bipartisan legislation to expand offshore oil drilling until Congress comes back for a possible lame duck session after the November presidential election. The House of Representatives cleared a bill last week to permit offshore drilling beyond 50 miles from the shoreline of the East and West coasts. House Democrats may try to add their drilling proposal to legislation that would temporarily fund the government past the current budget year that ends on Sept. 30. The massive annual spending bill nearly always passes. (Reporting by Tom Doggett, editing by Gene Ramos)
