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Senators launch bipartisan initiative on long term solutions to expiring energy tax credits  

Credit:  Iulia Gheorghiu | Utility Dive | May 21, 2019 | www.utilitydive.com ~~

Tax credits have proven effective in jump-starting energy industries and driving adoption of new technology and infrastructure. However, as credits wind down, the renewable energy industry has been gripped by uncertainty in recent years, with federal legislators approving short-term extensions.

Both the chairman and ranking member of the Senate Finance Committee announced a bipartisan initiative on Thursday to craft long-term solutions for the expiring tax breaks, with task forces focused on energy tax credits and disaster tax relief among others.

The wind production tax credit will end at the close of 2019 and the solar credit will begin to sunset. Already, industry groups like the American Council on Renewable Energy (ACORE) are predicting a decrease in renewable energy deployment in 2020, as the market is expected to constrict due to the expiring credits.

The task forces are expected to determine by the end of June long-term solution possibilities that can be enacted this year, “to end the annual extenders drama and provide certainty to the taxpayers who utilize those provisions,” Finance Chairman Chuck Grassley, R-Iowa, said in remarks on the Senate floor.

Other legislators have proposed bills intended to drive deployment by impacting a number of tax credits including energy storage, which has become a priority for this year in the renewable energy industry.

Task forces assemble

Legislators have an increasing need to strategize for the post-phase out period of tax credits in the energy industry.

“The modern renewable industry as we know it was built on the tax credits that are phasing out,” Bill Parsons, ACORE’s chief operating officer, told Utility Dive.​

Grassley and Ranking Member Ron Wyden, D-Ore., called for six task forces to assemble from the Senate Finance Committee. The energy task force, led jointly by Sen. John Thune, R-S.D., and Sen. Debbie Stabenow, D-Mich., and the employment and community development task force are the largest, with eight members each.

The task forces will focus on a total of 42 provisions that expired, or will expire, between the end of 2017 and the end of 2019. For energy, the group would work to establish a level playing field for technologies beyond a year-by-year extension decision, which can get kicked down the road, given shifting Congressional priorities, thus reducing certainty among investors.

Grassley stated possible solutions that the task forces might identify to provide long-term certainty for particular industries:

Phasing out the credit phases over a longer period, giving the industry “a glide path to self-sufficiency”

Scaling back the tax provision

Considering elimination of the provision “if there’s little or no case for continuing the temporary policy”

Extending provisions without reform and considering whether permanency is warranted

“The exercise appears to be an attempt to look past an ‘Extenders Era’ in the Tax Code,'” Parsons said.

Extending the wind tax credit or ensuring a viable long-term path for the credit is important in Iowa, known for its large amount of wind power. Iowa has over 7.3 GW of installed wind capacity, according to the Iowa Wind Energy Alliance.

However, Grassley’s staff could not speak to timing or potential products. Task force members will bring their priorities, according to a spokesperson from Grassley’s office.

The energy task force also includes Sen. Sheldon Whitehouse, D-R.I., who has helped lead bipartisan efforts to extend a carbon capture tax credit and other legislation intended to support the technology’s development.

House bills and a push for storage

While the Finance Committee task forces are getting underway, bills are being introduced in the House and Senate to support energy tax incentives.

Among the latest, on May 14, members of the House Ways and Means Committee introduced a bill that would allow the transfer of renewable energy tax credits beyond the specified technology.

Reps. Earl Blumenauer, D-Ore., and Darin LaHood, R-Ill., sought to continue increasing renewable energy deployment, specifically wind energy, by allowing the transferability of production and investment tax credits.

The bill will give the renewable energy industry “additional tools to help invest in the future of energy,” Blumenauer said.

In February, Grassley and Wyden introduced bipartisan legislation to restore all the tax provisions that expired at the end of 2017 and 2018 through the balance of this year.

Wyden also introduced in May, along with 25 Democrats, a technology-neutral approach to incentivize clean electricity, transportation fuel and conservation. The policy would consolidate 44 energy tax incentives into three technology-neutral provisions. The electricity component would provide a 30% investment tax credit or a $0.024/kWh production tax credit for facilities with zero carbon emissions.

“A lot of folks among ACORE’s members … are rallying behind that kind of (technology-neutral) approach,” Parsons said.

2019 priority: Storage

A key priority for 2019, however, is giving the energy storage industry access to tax credits. Industry groups have called on lawmakers to expand the qualification of energy storage systems under the investment tax credit for the past year.

“There is a wide range of policy options lawmakers can consider to make the grid more resilient and increase renewable energy deployment, but as far as our members are concerned, getting an energy storage tax credit done this year would be a great place to start,” Parsons said in a statement.

The Energy Storage Association (ESA) supported bicameral, bipartisan legislation last year to accomplish this, writing to lawmakers approaching the end of their term, but the measure did not pass.

At the beginning of April, Rep. Mike Doyle, D-Pa., introduced legislation long awaited by clean energy advocates, H.R. 2096: a tax credit for energy storage technologies. ACORE, ESA and other groups wrote letters to House leadership in support of the bill.

Including energy storage as qualifying facilities in the existing 30% investment tax credit has gained bipartisan support, and clean energy advocates want to see it included “as part of an extenders package or other viable legislative vehicle this year,” Parsons told Utility Dive.

Other options include adding it to an infrastructure package or as part of broader energy reform legislation.

Source:  Iulia Gheorghiu | Utility Dive | May 21, 2019 | www.utilitydive.com

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

The copyright of this article is owned by the author or publisher indicated. As part of its noncommercial effort to present the environmental, social, scientific, and economic issues of large-scale wind power development to a global audience seeking such information, National Wind Watch endeavors to observe "fair use" as provided for in section 107 of U.S. Copyright Law and similar "fair dealing" provisions of the copyright laws of other nations. Send requests to excerpt, general inquiries, and comments to query/wind-watch.org.

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