Green groups urge extension of clean energy credits

Source: Nick Juliano, E&E reporter • Posted: Tuesday, November 12, 2013

With just over six weeks remaining in the year — and, hence, in the current life cycle of some key clean energy tax credits — a coalition of environmental groups is calling on Congress to not let those incentives lapse.

It seems a long shot to expect congressional tax writers to turn their attention from the intensifying discussion of an overhaul of the tax code to deliver an extension of the expiring provisions before the end of this year. But failure to do so would create more problems for a slate of burgeoning industries, the groups wrote in a letter to members of the Senate Finance Committee.

“We urge you to ensure that these credits do not expire because these provisions are vital to the economy, the environment, and public health,” wrote the Sierra Club, the Natural Resources Defense Council, the League of Conservation Voters and 11 other organizations. “Without any clear directional policy, renewable energy projects cannot plan for the future. This has placed huge uncertainty on burgeoning and fledgling clean energy industries.”

The letter highlights several provisions that expired last year or are scheduled to expire this year or soon thereafter. The most significant of those is the production tax credit (PTC), which primarily supports installation of new wind farms. After a record of more than 13,000 megawatts installed in 2012, the wind industry has added less than 70 MW of new capacity this year, a collapse in activity tied to uncertainty surrounding the PTC (Greenwire, Oct. 31).

When it finally did get extended in January, the PTC also saw its eligibility requirements extended such that developers must merely start construction on their project before this year ends to qualify, whereas projects previously had to be fully operational in order to claim the credit. That provides a bit of breathing room for development to continue through next year while broader tax reform discussions play out.

The greens’ letter also highlights the investment tax credit (ITC), which applies to offshore wind and certain other projects through the end of this year, under the same start-construction rules as the PTC. Solar developers can also claim the ITC through 2016, but their projects must be complete to qualify. The environmental groups say the start-construction requirement should be equally applied across all technologies.

The groups also call for extension of expired or expiring credits designed to promote energy-efficient homes and appliances, incentivize advanced manufacturing, and provide benefits for employees who use public transportation to get to work.