Congress’ move to turn the economic bailout green by extending the renewable energy tax credits has been a saving grace to the industry. Though the extensions will greatly benefit the green economy, the clean tech industry is not clear of financial turmoil yet.

The renewable energy tax credit extensions will no doubt have a positive affect on the industry. Speaker of the House Nancy Pelosi stated that the extensions could have saved and created nearly half a million jobs while solar and wind industries argued that the had the credits expired the tax credits could have cost the industries a combined $19 billion.

However, the new legislation far from a long-term renewable energy plan. The legislation affords an 8-year extension to the solar energy industry’s investment tax credit but only 1-year extension to the wind energy industry’s production tax credit.

The lack of a long-term energy plan hinders investment in the renewable energy sector. Next year, the U.S. could face a similar battle to get the renewable tax credits renewed, and the foundation on which the wind industry is built could again become fragile.

As well, with the loss of major investment banks such as Lehman Brothers, smaller companies will have a harder time finding start-up capital. This lack of capital could weed out smaller companies, or as Forbes’ William Pentland speculates, it could cause smaller companies to build alliances with larger energy companies. A long-term energy plan will provide stability to the renewable energy market and help investors plan when they might see a return.

By Don Miller at The Element Agency in New York.