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House Democrats include wind and solar tax credit extensions in sweeping infrastructure bill

House Democrats are proposing to extend wind and solar tax credits by at least five years as part of their $1.5 trillion infrastructure package, teeing up a fight with Senate Republicans.

The infrastructure bill, the Moving Forward Act, incorporates a discussion draft released late last year by Democrats on the House Ways and Means Committee that would extend a variety of clean energy tax credits. House Democrats released the text of the package on Monday.

In addition to the wind and solar tax credits, which would be extended for five and six years, respectively, the legislation would extend incentives for carbon capture technology and offshore wind. The bill would also create an incentive for energy storage, waste energy technologies, and qualifying biogas projects.

The legislation would also allow renewable energy developers to receive their tax credits as direct payments, a step the industry has requested from Congress for months to help maintain funding for projects during the virus-related economic downturn.

The renewable energy provisions “would provide a stable and effective policy platform for clean energy deployment over the next five years,” said Gregory Wetstone, head of the American Council on Renewable Energy.

He added in a statement that the provisions on energy storage, offshore wind, and direct pay “would be especially helpful in realizing the full potential of renewable deployment.”

The inclusion of the clean energy tax credit language follows increasing pressure on House Speaker Nancy Pelosi from rank-and-file Democrats to include aid to the renewable energy sector in coronavirus relief efforts. The renewable energy industry has shed nearly 100,000 jobs since the pandemic began, according to analysis from BW Research, Environmental Entrepreneurs, the American Council on Renewable Energy, and E4TheFuture.

Some Democrats quickly welcomed the clean energy provisions in the bill. The infrastructure-specific pieces of the legislation also include a significant climate focus, including massive investments in electric cars, zero-emissions buses, and electricity grid modernization to support more renewable energy.

Pelosi has said she intends to bring the bill up for a vote before July 4. House Transportation Committee Democrats cleared a nearly $500 billion surface transportation bill, the vehicle for the broader package, on June 18.

“With this package, we have a tremendous opportunity to put Americans back to work in the short-term while modernizing our infrastructure to achieve a cleaner, more resilient, more competitive, and more just economy overall,” said Rep. Paul Tonko, a New York Democrat who chairs the environment and climate change subcommittee of the House Energy and Commerce Committee. He and New Mexico Sen. Martin Heinrich recently led a bicameral letter of more than 50 Democrats calling on congressional leadership to support clean energy in virus-relief legislation.

Nonetheless, the inclusion of renewable energy tax credit extensions is likely to anger many Republicans, who slammed Democrats in March for attempting to add clean energy priorities to the CARES Act.

“Democrats won’t let us fund hospitals or save small businesses unless they get to dust off the Green New Deal?” Senate Majority Leader Mitch McConnell said in heated floor remarks March 23 during that debate.

And Senate and House Republicans have already criticized the Democratic infrastructure bill as akin to the progressive “Green New Deal,” even before the renewable energy tax credit provisions were added.

That hasn’t stopped Democrats from leaning heavily on climate change when touting their bill.

“On the tax front, on the renewables, it’s extraordinary what we’ve done, and we’ve provided details as to how we would best do it,” said Rep. Richard Neal, the Massachusetts Democrat who chairs the House Ways and Means Committee, on Thursday.

“This is the largest tax investment in combating climate change that Congress has ever made on the renewable front,” he added.

There is one area where Democrats and Republicans may not have as much trouble finding compromise, however.

House Democrats, in their bill, propose extending tax credits for carbon capture by two years, a provision that actually doesn’t go as far as a House Republican proposal from earlier this year to make that incentive permanent. Several House Republicans, too, have asked congressional leadership to extend deadlines and allow direct pay for carbon capture incentives to help project developers weather the economic slowdown.

Brad Crabtree, who directs the Carbon Capture Coalition, said in a statement that House Democrats’ inclusion of the tax credit relief “further underscores growing bipartisan support for economywide deployment of carbon capture.”