Expanding clean energy tax credits would produce serious emission cuts, report says

Source: By Josh Siegel, Washington Examiner • Posted: Thursday, September 26, 2019

If Congress were to extend and expand various tax credits for clean energy technologies, the U.S. could achieve emissions reductions of up to 125 million tons compared to current policy in 2025, says a report Thursday by the Rhodium Group.

Those emissions cuts could close one-fourth of the “gap” between projected U.S. emissions under current policy and what the U.S. targeted under the Paris agreement.

The report comes as the House Ways and Means Committee is planning a clean energy tax credit package, and the Senate Finance Committee is reviewing expiring tax breaks.

Extending solar and wind credits: Rhodium evaluated the emissions impact of various proposals in Congress, such as extending the investment and production tax credits for wind and solar that begin to phase down starting in 2020.

If extended through 2025, there would be an additional 31 to 97 gigawatts of additional cumulative solar and wind capacity by 2030, Rhodium found.

This results in 19 to 31% of U.S. electricity generation coming from wind and solar by 2030, compared to 8% last year, which could push power sector emissions down 42 to 48% below 2005 levels.

Creating a nuclear tax break: A new investment tax credit for existing nuclear plants, supporting fuel, operating and maintenance costs, could prevent 24 to 33 gigawatts of nuclear capacity from retiring through 2025, reducing power sector emissions 102 to 125 million tons.

More help for EVs: Extending the the $7,500-per-vehicle tax credit for electric vehicles through 2025, while lifting a cap on vehicle manufacturers that can qualify for it, would lead to an additional 2.9 to 6.5 million EVs sold.

That would reduce transportation emissions by 1 to 7 million metric tons of CO2 in 2025, Rhodium says.

The EV tax credit, first introduced in 2009, is capped at 200,000 vehicles sold per automaker, a threshold that Tesla and GM have already met.