House Democrats building clean energy financing momentum

Source: Jeremy Dillon, E&E News reporter • Posted: Monday, April 8, 2019

As House Democrats look for solutions to reduce carbon emissions to combat climate change, a large contingent of lawmakers are zeroing in on tax incentives for renewable technology and battery storage as one policy lever for near-term action.

That effort earned major endorsements yesterday as more than 100 House Democrats wrote a letter to the leadership of the House Ways and Means Committee to urge action on a series of clean energy tax credits.

That tax package could even include, the group wrote, an extension of wind and solar production and investment tax credits originally set to phase out during the coming years. They were outlined in the 2015 omnibus spending deal that also opened up crude oil exports.

“For many of us who served in 2015 when that bipartisan, bicameral agreement was reached, the facts on the ground have now changed demonstrably,” said the group, led by Reps. Haley Stevens (D-Mich.) and Paul Tonko (D-N.Y.), the chairman of the Energy and Commerce Subcommittee on Environment and Climate Change.

“The latest extension and phase-out of these clean-energy tax credits were intended to serve as a bridge to the implementation of the EPA’s Clean Power Plan, among a suite of other regulations and policies to reduce carbon emissions,” they added. “This is no longer the case.”

The wind and solar tax credits — and the certainty provided by the five-year extension at the end of 2015 — have largely been credited for the dramatic increase in renewable deployment the past four years.

So much so, Democrats in both chambers have expressed interest in potentially making them permanent as a way to match clean energy tax incentives with those fossil fuel credits ingrained in the tax code (E&E Daily, Feb. 28).

In addition to the wind and solar credits, the group is also calling for an extension of a host of credits — known as tax extenders — related to energy efficiency and other renewables like geothermal and small-scale wind facilities that expired at the end of 2017.

One of the benefits of lifting the cap for tax credits for electric vehicles is shifting the transportation sector to low-carbon alternatives, the letter said.

“Simply put, investments in clean energy will help the U.S. reduce carbon pollution, prepare our communities for the damaging effects of rising sea levels, severe weather and catastrophic wildfires, all the while supporting innovation and job creation positioning the US to lead in a global clean energy economy,” the group said.

One proposal took tangible form yesterday when Rep. Mike Doyle (D-Pa.) introduced legislation to open an investment tax credit (ITC) for battery storage.

The technology has been largely hailed as energy’s holy grail by some such as Energy Secretary Rick Perry, and its costs have decreased by nearly 80 percent since 2012. Battery storage has, however, more cost reductions to go to better compete with other technologies on the grid.

“There have been important advances in energy storage technology in recent years, and the field continues to produce rapid developments,” Doyle said in a statement. “This bill would promote greater investment and research in energy storage technologies, bolster the advanced energy economy, and create more clean energy jobs.”

The new legislation aims to achieve those improved cost reductions by reducing the tax burden for the emerging technology.

As of now, some battery storage technology ITCs can be claimed in conjunction with the solar ITC. Those type of credits need clarity though, which backers say this new bill would provide by listing “a wider range of applications and provide greater assurance to prospective investors” through the ITC.

“It is a simple and impactful clarification of the current investment tax credit that would ensure equitable access for stand-alone storage and send long-term investment signals to an industry that supports tens of thousands of jobs nationwide,” said Energy Storage Association CEO Kelly Speakes-Backman.

The overall tax effort appears to be one of the more immediate action areas that the renewable industry has identified as a potential vehicle to promote faster deployment of the technology.

In a briefing for Capitol Hill staffers yesterday, renewable energy advocates argued that financial incentives could do more to drive renewable deployment than federal mandates.

“I just want to underscore how critically important having the right tax policies in place are for solar deployment and development,” said Erin Duncan, vice president of congressional affairs with the Solar Energy Industries Association.

“We are advocating for solar to be included in any tax package,” she added. “Our solar ITC starts to step down at the end of 2019, and we are engaging in conversations as tax policy comes into clearer view about what the next step might be. We expect solar to be part of any conversation.

“We want to be held in equal esteem as other sources of fuel.”