Democratic lawmakers in the U.S. House of Representatives this week introduced several pieces of legislation that could buoy renewables as part of a larger infrastructure package.
The Moving Forward Act, the text of which was released Monday, includes extensions of both the Production Tax Credit and the Investment Tax Credit to 2025 as part of a behemoth $1.5 trillion infrastructure bill. On Thursday, lawmakers also inserted into the infrastructure package the Growing Renewable Energy and Efficiency Now (GREEN) Act, which was unveiled in November as draft legislation.
If adopted, the legislation would extend the ITC for solar and offshore wind by five years and allow energy storage to use that credit as well. It maintains the 60 percent PTC through 2025 and allows for “direct pay” instead of relying on tax equity investors. The Moving Forward Act would also require the Federal Energy Regulatory Commission to work on a regional transmission rulemaking that could ease bottlenecks in the transport of renewable energy.
With policymakers battling over COVID-19-related priorities, renewables provisions face long odds stemming largely from Republican pushback, particularly in the Senate. But the legislation does indicate that clean energy groups are gaining traction on Capitol Hill. Even before the coronavirus pandemic upended some renewables projects, wind and solar advocates were lobbying feverishly for the extension of tax credits (wind won a one-year extension in 2019).
Renewed calls for tax credit extensions have become even more urgent in the face of the coronavirus pandemic. Though large-scale wind and solar projects have generally been able to hew closely to schedules, the distributed solar industry has reported layoffs, drops in demand and declining sales. The Solar Energy Industries Association has reported 72,000 solar job losses (including both layoffs and the loss of jobs that would have been created).
After the novel coronavirus arrived in the U.S., clean energy organizations also sought tweaks that make those incentives easier to use, such as direct pay. In May, the U.S. Treasury Department released guidance that allowed wind and other resources more time to meet tax credit deadlines.
This week’s legislation serves as another infusion of hope for renewables companies. Abigail Ross Hopper, president and CEO of SEIA, said in a Thursday statement she was “heartened” to see lawmakers prioritizing renewables. Kelly Speakes-Backman, CEO of the Energy Storage Association, said the group “greatly appreciate[s]” storage's inclusion in the bill. In response to the Moving Forward Act, American Wind Energy Association CEO Tom Kiernan said the legislation “puts the wind industry a step closer to tax policy parity with other energy sources.”
In addition to clean energy provisions, the infrastructure package includes measures on a wide range of issues such as affordable housing, health care and highways. The House plans to vote on the bill before July 4.