The Trump administration is signaling it is about to offer a lifeline to solar and wind projects battered by the coronavirus pandemic.
In a letter sent to senators Thursday, the Treasury Department said it is considering ways to let solar, wind and other alternative energy developers continue to qualify for tax incentives critical for paying for the building of wind turbines and solar panel arrays – even if construction is put on hold.
The decision is a coup for businesses trying to move the country toward cleaner energy but were facing potential delays in construction and funding due to the coronavirus pandemic. Until now, there was no specific help given to alternative energy companies in the country’s economic relief efforts even as President Trump and his administration search for ways to help struggling oil and gas companies.
“Projects that have been waylaid by the economic disruptions of this pandemic can now proceed with more certainty,” said Charles E. Grassley (R-Iowa), who led a bipartisan group of six senators in asking the department for the relief for renewables.
Like so many other parts of the economy, renewables have been creamed by the coronavirus pandemic.
According to one analysis, about 106,000 solar panel installers and other clean-energy workers have already filed for unemployment in March as developers see funding halted and supply chains disrupted.
In particular, solar and wind developers need to complete construction on projects within four years to receive juicy government incentives used to help underwrite development.
In an April 23 letter, the group led by Grassley – whose state has about 4,700 wind turbines and gets a third of its electricity from wind as of 2018 – asked the Treasury to give developers a fifth year to get the work done.
In response, Frederick W. Vaughan, a principal deputy assistant secretary at the Treasury Department, wrote the department “plans to modify the relevant rules in the near future.”
While the letter was short on specifics, Gregory Wetstone, head of the American Council on Renewable Energy, a renewables lobbying group, was encouraged by the news. “Extending these safe harbor deadlines would be immensely helpful as the renewable sector has been hit hard these last couple of months,” he said.
The Trump administration and Congress have so far paid little attention to renewables in covid-19 legislation.
That’s despite the fact that hydropower, wind and solar constitute roughly one-fifth of all power produced in the United States.
By contrast, Trump and his deputies have vowed at various times to come to the rescue of the oil and gas sector, which has been hit hard by a dramatic collapse in energy demand that made the price of crude go negative for several hours last month.
It appears increasingly unlikely Congress will address energy infrastructure in the next bill.
House Democrats are assembling a massive new coronavirus rescue package, which is expected to exceed $2 trillion and could get a vote next week. Lawmakers are aiming to include a hodgepodge of measures, including money for the Postal Service, rural broadband and rent and mortgage relief, to kick-start economic activity that cratered under stay-at-home orders.
But any provision related to energy infrastructure, including adjusting tax credits meant to boost alternative energy investment, appears to be off the negotiating table for now, according to both a House Democratic aide and an industry executive.
While Rep. Paul Tonko (D-N.Y.), chair of the House Energy and Commerce subcommittee on the environment and climate change, did not rule out the inclusion of clean-energy tax incentives in the next bill, he said the priority in the next stimulus package will be getting relief to front-line workers and to state and local governments.
“That will be the big focus right now,” he said in an interview Thursday.
A set of green tax incentives could gum up getting another coronavirus relief bill through the Senate.
Senate Majority Leader Mitch McConnell (R-Ky.) hasn’t committed to doing another round of stimulus, but did make clear Tuesday he is uninterested in including what he called “unrelated, ideological wish list items” in any future coronavirus legislation. In March, he rejected a request from Democrats to include a set of clean-energy incentives in a $2 trillion coronavirus relief bill.
Tonko, who has put forward a comprehensive climate bill, insisted that Congress needs to heed scientists’ warnings and tackle both climate change and the coronavirus.
“Science is guiding us and instructing us,” he said.
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