The American Wind Energy Association, whose members include Fairfield, Connecticut-based General Electric Co., is lobbying to extend the break for four years. The report assumes the credit expires at the end of 2012.
As stimulus projects end and other subsidies expire, the U.S. clean-energy industry risks a collapse without some overhaul of the federal system that backs it, the report said.
Jesse Jenkins, director of energy and climate policy for the Breakthrough Institute, said in an interview the U.S. should reward the most competitive technologies through programs such as a reverse auction in California, where renewable-power providers bid to win service contracts.
The U.S. should "harness competition and reward market leaders," he said.
The report recommends tripling the $4.7 billion spent a year on energy research, development and demonstration, and replacing the Energy Department's loan guarantee program that backed failed solar-panel maker Solyndra LLC with a Clean Energy Deployment Administration independent of the department.
Senator Jeff Bingaman, a New Mexico Democrat and chairman of the Energy and Natural Resources Committee, has introduced legislation to create a so-called green bank. Senators have been unable to agree about how to pay for the organization.