RENEWABLE ENERGY

House Democrats Push for Renewable Energy Tax Credits in Coronavirus Stimulus

Environmental advocacy, renewable energy trade groups rally for seven provisions

Luminalt solar installers Pam Quan (L) and Walter Morales (R) install solar panels on the roof of a home on May 9, 2018, in San Francisco, Calif. (Justin Sullivan/Getty Images)
March 17, 2020 at 7:40 pm ET

As lawmakers continue to hammer out legislation to address the impact of the coronavirus pandemic, House Democrats are looking to insert renewable energy tax credit provisions into a larger stimulus package aimed at stabilizing the economy. 

The House Sustainable Energy and Environment Coalition co-chairs said in a joint statement to Morning Consult that they have an eye toward addressing “both the economic slowdown we are facing as a result of COVID-19 and the ongoing climate crisis” with these measures.

“Our members pushed for these credits in the [2019] end-of-year funding package and will continue to fight for them in this round of economic stimulus,” said Reps. Gerry Connolly (D-Va.), Paul Tonko (D-N.Y.) and Doris Matsui (D-Calif.). 

The seven potential tax credit provisions were the subject of a Feb. 27 letter that 24 environmental advocacy groups and renewable energy trade associations sent to the leaders of the House Ways and Means Committee and the Senate Finance Committee. The groups pushed Congress to prioritize codifying clean energy tax incentives promoting the use and production of electricity storage systems, solar, wind and electric vehicles, among others.

Now, those same advocacy and trade groups have seized the opportunity to rally support for the measures as part of a potential economic stimulus package to address the coronavirus pandemic. They are in touch with members of the House sustainable energy coalition, as well as the Senate Climate Crisis Special Committee, the House Ways and Means Committee, the Senate Finance Committee and leadership in both chambers of Congress, according to Bill Parsons, chief operating officer of the American Council on Renewable Energy. 

Lawmakers reportedly have two separate stimulus packages in the works: one that would attend to more immediate public health and emergency financial concerns of those impacted by the coronavirus pandemic, and one that would shore up the industries impacted by the anticipated economic downturn. Renewable energy tax credit provisions are currently being considered as part of the latter package.

“The renewable energy industry is definitely not immune to the supply-chain disruptions that accompany a pandemic like this,” Parsons said. “Because of supply-chain disruptions and the time sensitivity of developers’ ability to monetize these tax credits, COVID-19 is already having a damaging impact on the renewable sector, and we expect that impact will only worsen over time.”

As a consequence of the pandemic, the U.S. renewables industry is facing widespread supply chain issues because the materials needed for wind and solar infrastructure come largely from China. And these concerns are compounded by the fact that two existing tax credits are approaching their ends: the investment tax credit for solar and other technologies (which decreased from 30 percent in 2019 to 26 percent to 2020, and is subject to future phase-downs) and the production tax credit for wind (which is expiring in 2021). The last time renewable energy tax credits saw a major extension was in the 2009 stimulus bill following the 2008 financial crisis.

“If the purpose of an economic stimulus bill is to provide support to people and industries that have been adversely impacted by coronavirus, the renewables sector absolutely meets that criteria,” said Parsons, citing the supply-chain disruptions, the tax credit availability and the urgency of addressing climate change.

The American Wind Energy Association has joined Parsons’ association in voicing the industry’s concerns on the Hill, sharing ideas “to enable these projects to proceed so the jobs, community benefits and economic investment from wind energy can continue to flow into rural communities and manufacturing centers,” said Amy Farrell, the association’s senior vice president of government and public affairs. 

Advocates for the measures broadly mirror the sentiments of Fatih Birol, executive director of the International Energy Agency, who wrote in a LinkedIn post that investment in renewable energy should be “a central part” of governments’ plans for economic recovery in light of the coronavirus pandemic. 

“These stimulus packages offer an excellent opportunity to ensure that the essential task of building a secure and sustainable energy future doesn’t get lost amid the flurry of immediate priorities,” he wrote.

A number of the provisions that Democrats are currently pushing for are also featured in the Growing Renewable Energy and Efficiency Now Act, which was released as a House Ways and Means Committee discussion draft in November, but has yet to be formally introduced. 

The independent research provider Rhodium Group found that the GREEN Act could reduce U.S. net greenhouse gas emissions by nearly 100 million tons by 2030. But passing the bill would necessitate finding a way to pay for it, which would likely be a roadblock. Stimulus bills, however, by definition are never paid for.

Parsons emphasized that this rally for renewables is not an extreme measure.

“This package of critical clean energy tax incentives isn’t the Green New Deal. It isn’t even the full GREEN Act,” he said. “It’s a targeted subset of the GREEN Act that already enjoys bipartisan support and is ripe for inclusion in economic stimulus legislation.”

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