Lobbyists for clean energy industries are confident, despite some recent setbacks, that 2020 is the year Congress will pass tax incentive policies.
After spending most of the year lobbying the Senate and House to create a new tax credit for energy storage and extend credits for solar power, wind power and electric vehicles, industry representatives say they hope to continue the momentum from last year and try again.
“We’ve got all the pieces in place; now it’s time to just take it over the finish line,” said Kelly Speakes-Backman, CEO of the Energy Storage Association.
“I don’t think we’ve ever gotten closer to having this ITC [investment tax credit] for storage done,” she said. “I think we’re on the right track with our strategy,” which focused on building coalitions with groups representing other industries, such as electric utilities and environmental groups. They also kept bipartisan sponsors of the legislation front and center.
ESA and its allies want Congress to create an ITC for energy storage projects, similar to the existing one for solar energy.
“We’ll continue to look for opportunities in various bills,” said Abigail Ross Hopper, president of the Solar Energy Industries Association.
Advocates were hopeful Congress would include the storage, the wind energy production tax credit, and extensions of the solar credit and the electric vehicle purchase tax credit as part of an end-of-the-year spending and tax deal that lawmakers and President Trump reached in December.
But the plan fell through, something Democrats blamed on the White House (E&E Daily, Dec. 18, 2019). The resulting legislation provided a one-year extension of the wind energy credit, to align its downward glide path with one of the solar credits, and granted a five-year extension to the tax credit for biodiesel.
Numerous companies and associations in the renewable energy, storage and electric vehicle industries significantly boosted their lobbying expenditures last year as they pushed Congress to extend their benefits (E&E Daily, July 30, 2019). Thus far, advocates are not rethinking their previous strategies, which they see as durable going into the next fight.
“We were able to put a pretty broad coalition of Republican and Democratic lawmakers, as well as some unconventional partners. So that work and that support will be helpful in whatever next steps we take,” said Hopper.
“We have to continue to talk about the economics of this, and how much has been created as a result of the investment tax credit is the most compelling narrative,” she added. “We will continue to tell this story.”
Greg Wetstone, president of the American Council on Renewable Energy, agreed.
“We’re going to pick up where we left off,” he said. “We’ve got a broad coalition for a number of clean energy incentives that ended up on the cutting-room floor, and we’re going to be looking for opportunities in 2020.”
The main unknown for the clean energy credits is which legislation lobbyists can convince lawmakers to attach them to.
Industry representatives said tax bills are the most likely vehicles, and there will be at least two opportunities this year: a package of health-related policies that expires and will need to be renewed in May, and a group of other tax provisions that will run out at the end of 2020.
But other must-pass legislation could serve as the launch pad, as well, such as surface transportation legislation that lawmakers are due to pass this year.
“Before the year end, there’s certainly going to [be a] discussion about things like surface transportation reauthorization, and there’s going to be a sense that if there’s any movement on legislation that includes a tax title, there’s going to be even more of a priority on getting something included in that,” said a representative of a clean energy company.
“You’ll see quite a bit of activity through the year to push these all forward,” the representative said.
Lawmakers in both parties said last month they, too, want to revive a push for the energy-related tax incentives that did not get into the major agreement (E&E Daily, Dec. 19, 2019).
But while the industries keep up their push, a coalition of conservative groups plans to keep opposing them, arguing that the tax credits – particularly the one for electric vehicles – are wasteful.
Tom Pyle, president of the American Energy Alliance, said his group sees the momentum as going in its direction, and it wants to keep pushing, even to repeal the credits.
“We’re going to continue to make the case for why we should stop the expansion of these credits, but also go on the offense and hopefully start winding some of these down, which is clearly going to be harder to do,” said Pyle, who added that allies feel the same way.
Pyle’s group and others, such as Americans for Tax Reform and Citizens Against Government Waste, have worked both publicly and privately to push Republicans to stand firm against the tax break proposals. The electric vehicle credit was central to their strategy, a recognition of Trump’s outspoken opposition to the credit and their calculation that it is the easiest to oppose.
Pyle thinks the clean energy industries are weakened, pointing in part to Senate Finance Chairman Chuck Grassley (R-Iowa), who was an advocate for the incentive package but won a credit extension for biodiesel, a key issue for his Iowa constituency.
“There’s no motivation for Grassley to be a champion,” Pyle said.
“It’s a critical year for us to keep them at bay, and maybe we can go on the offense to get these things taken down and work toward a level playing field.”
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