U.S. wind, solar industries plead for tax credit ‘tweaks’ to keep projects alive during virus outbreak
Wind and solar companies, facing project delays that threaten their ability to tap lucrative green energy subsidies, are pleading with lawmakers for help after not being included in the $2 trillion U.S. coronavirus stimulus package.
Renewable energy groups including the Solar Energy Industries Association and the American Wind Energy Association spent the last week warning that business disruptions related to the coronavirus pandemic could result in the loss of 160,000 jobs if Congress does not extend deadlines here for projects to qualify for sunsetting federal tax credits.
Those requests were not included in the $2 trillion coronavirus aid package expected to be approved by the Senate on Wednesday, after Majority Leader Mitch McConnell lumped the industry’s asks into a list of “unrelated demands” by Democrats that he said were slowing down the legislation.
Green energy companies are hopeful their requests will be included in a subsequent bill that is expected to aid specific sectors, according to Greg Wetstone, president of the industry trade group American Council on Renewable Energy.
Wind and solar companies argue that their challenges are unique because they face strict deadlines for claiming tax credits passed by Congress years ago. The global pandemic will almost certainly cause some projects that had planned to use those credits to miss their opportunity.
“We do not need a bailout,” said Sheldon Kimber, chief executive of solar developer Intersect Power, which has five projects beginning construction in California and Texas this year. Kimber said the industry needs “a handful of definitive tweaks to the tax credits we already get.”
The sector is already experiencing labor stoppages in states like California that are under stay at home orders to help slow spread of the virus. And shipments of supplies of solar panels and other components have been disrupted due to coronavirus lockdown orders in Asia and Europe.
Pattern Energy Group, a major U.S. developer of wind and solar projects, has both sent and received notices of force majeure, Chief Executive Mike Garland said in interview. Force majeure refers to unexpected circumstances that prevent a party to a contract from meeting their obligations.
Developer Invenergy LLC also issued a force majeure notice on its 300 megawatt (MW) Badger Hollow solar project in Wisconsin, according to a regulatory filing, citing the potential impact of factory shutdowns and travel restrictions on its suppliers and contractors. A spokeswoman for Invenergy declined to comment.
8minute Solar Energy halted work on its 50 MW Lotus solar farm in California last week after Governor Gavin Newsom called on residents statewide to stay at home.
About 50 employees had been working on the project, which was expected to be completed in May and will produce power for more than 12,000 households for utility Southern California Edison.
But the California developer is more concerned about their ability to secure financing for early-stage projects during a public health crisis that is giving lenders pause and causing major doubts about companies’ ability to meet tax credit deadlines, said Josh Goldstein, its chief operating officer.
“If that ability to monetize the tax credit goes away, you have gigawatts and gigawatts of projects that were supposed to be built over the next two to three years that are very much in jeopardy,” Goldstein said.
Reporting by Nichola Groom; Editing by Bill Berkrot
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