Renewable tax credits behind the massive deployment of wind and solar technologies during the past few years may get a second life as Democrats are expressing interest in extending them beyond their upcoming sunset dates.
The interest – still in its beginning stages – is likely to launch the latest round in the debate about federal subsidies in the energy marketplace as renewable power reaches a maturation point that enables it to compete against more established power generators.
And the effort may only gather more momentum in the coming months as climate change and the “Green New Deal” have put an added emphasis on the federal government’s role in encouraging clean energy deployment.
“As part of our commitment to dealing with the realities of climate, it’s one of our priorities,” Sen. Ben Cardin (D-Md.), a member of the Finance Committee, told E&E News yesterday. “So, yes, we are looking at the renewable credits, their expiration dates, whether we can make them longer and more effective.”
Supporters are likely to target an upcoming debate over a host of credits, Cardin said. On the table are incentives for a host of energy and biofuel technologies, including small-scale wind and geothermal.
“There have been at least a dozen false starts on the tax extenders package, so I think it’s our hope … that as we talk about tax extenders, that would be one of the issues,” Cardin said.
Lawmakers extended the renewable credits, known as the wind production tax credit (PTC) and the solar investment tax credit (ITC), at the end of 2015 as part of a broader deal that ended the decadeslong crude oil export ban.
That deal called for a five-year extension, with a phaseout of their worth until they sunset. As it currently stands, the wind incentive will taper out by the end of 2019, while the solar credit will slope down by 2022.
Senate Finance Chairman Chuck Grassley (R-Iowa) was caught off guard when informed of Cardin’s remarks yesterday.
“I don’t think I could in good conscience join that effort, not because I changed my mind on wind energy, but we’ve pleaded with so many opponents, ‘Just let us phase it out. And we can do it in five years,’” Grassley told E&E News. “And we made that decision in 2015. I think it would be wrong for me to go back on my word.”
Grassley has been one of the wind industry’s biggest cheerleaders on Capitol Hill. As a younger lawmaker, the Iowa Republican helped to shepherd the original wind tax credit into existence, and during the 2017 tax overhaul debate, he helped ensure that the credit remained intact against House Republican efforts to end it.
Sen. Ron Wyden of Oregon, the top Democrat on Finance, did not deny Democrats’ interest in revisiting the 2015 deal that phased down the PTC.
“Obviously I’m trying to figure out how to get to common ground, and I’ve had some preliminary conversations with Chairman Grassley,” he said.
Wyden noted his support for the Shepherds Flat Wind Farm in his state, which at one point was the world’s biggest wind facility.
“I’m a big supporter, and I’ll certainly work with all of my colleagues to do as much on wind as we can,” he said.
In the House
Rep. Earl Blumenauer (D-Ore.) said yesterday that Ways and Means Chairman Richard Neal (D-Mass.) is determined to scrutinize the GOP tax rewrite more broadly before taking on discrete tax issues such as extenders.
“Richie is, I think, going to be dealing with this in a very systematic fashion, and I don’t think there’s any advantage for him to get out ahead of the process that he’s set up,” Blumenauer told E&E News yesterday.
Neal issued a statement yesterday in which he expressed support for more climate-related action from Congress. That effort would include additional hearings from his committee, including on the “Green New Deal” (E&E News PM, Feb. 27).
Blumenauer, a senior Ways and Means member and longtime renewable advocate, said he’s had discussions with Senate Democrats about the PTC.
“I’ve been deeply involved with that, but this is part of a larger conversation to make sure that it’s part of what we want to do in a comprehensive effort,” he said, noting the challenges facing renewable energy, including uncertainty about the tax code and the effects of President Trump’s hard-line trade policies.
Renewable trade groups say they have not actively sought an extension to the credits.
“We have not asked for an extension of the ITC, but this policy has generated billions of dollars in private-sector investment and created hundreds of thousands of jobs, and so it isn’t a surprise that lawmakers would consider an extension,” said Dan Whitten, vice president of public affairs for the Solar Energy Industries Association.
“The bottom line is that we want policies that will put solar on a level playing field with all other fuels, and we would note that all energy resources receive some level of government support,” he added.
In the time since Congress extended the credits in 2015, the solar industry anticipates that nearly 100 gigawatts of energy will be deployed as a result of the ITC by 2022, including the creation of 170,000 jobs and $140 billion in economic activity.
The wind industry says it has experienced similar returns. According to the American Wind Energy Association, an estimated 23,000 megawatts of wind energy has been added since 2016, bringing total wind capacity to approximately 96,000 MW.
“The wind industry agreed to an orderly phaseout of the production tax credit, which has created a record number of American wind power jobs and kept U.S. factories open,” said Bree Raum, AWEA’s vice president of federal affairs.
“We aren’t actively asking for an extension to our PTC and favor federal energy policies that would help renovate and modernize our aging power transmission lines, and allow all technologies to compete to provide carbon emissions reductions at the lowest cost to consumers,” she added.
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