Mayors join push to extend solar incentive

Source: By Geof Koss, E&E News reporter • Posted: Tuesday, October 22, 2019

The mayors, who represent cities in states from Washington to Florida, are calling for five more years of the ITC, which is scheduled at the end of this year to start dropping from its current 30% value to 10% for commercial projects in 2022. That same year, the value drops to zero for residential projects.

“The communities we serve, including residents and local businesses, have seen the rewards of investing in technology like solar,” the mayors wrote in a letter to lawmakers.

“Year after year, we have seen the number of solar installations grow in our towns and cities. Adoption of renewable energy has accelerated as a result of policies such as the [ITC], which has made it possible for more people, in more places, to choose solar energy and lower electricity bills.”

Specifically, the mayors are calling for the enactment of a pair of bills — S. 2289 and H.R. 3961 — introduced this summer that would extend the ITC for commercial and residential properties for five years.

Those bills would also extend the ITC for other qualifying energy sources, including fiber-optic solar, fuel cells, small wind, microturbines, combined heat and power, and geothermal heat pumps (E&E Daily, July 26).

The letter, spearheaded by the Solar Energy Industries Association, is the latest show of support for revisiting the terms of the 2015 tax deal, which also extended and phased down the renewable production tax credit (PTC) often associated with wind.

“More than 200 mayors from 39 states are stepping up to defend the ITC,” said SEIA CEO Abigail Ross Hopper in a statement. “Mayors are increasingly turning to solar energy to fight the effects of climate change and generate millions of dollars of private investment in their cities.”

The most likely vehicle for extending the ITC would be a tax extenders package, which interest groups have targeted for months to extend an assortment of expired or soon-to-lapse energy tax breaks.

While the ITC isn’t expired, it’s one of several incentives that are still on the books that Congress is facing pressure to make changes to, along with the electric vehicle tax credit and others.

In comments delivered to a bipartisan Senate Finance Committee energy extenders task force in June, SEIA justified its request for extensions in part on President Trump’s tariffs on solar panel imports.

“At the time of the 2015 legislation, there was no way for the solar industry or Congress to anticipate the high tariffs on imported solar panels, inverters and other materials (such as steel and aluminum) used in the construction of solar facilities,” SEIA wrote at the time, according to the task force’s final report.

“Whatever one’s views on tariffs, it is indisputable that both the protracted threat of tariffs and the tariffs themselves were deeply damaging, injecting long-term uncertainty, freezing business deals and casting a chill over future development.”

Senate Finance Chairman Chuck Grassley (R-Iowa), who is a strong supporter of the PTC, said earlier this year that he could not actively push to change the terms of the 2015 deal, after promising at the time to support the phaseout schedule for that incentive (E&E Daily, Feb. 28).

However, he’s also signaled that he could support a broader package of tax extenders that includes changes to existing breaks, although he noted in May that it’s an uphill fight (E&E Daily, May 2).

Grassley’s support for an expired biodiesel blender’s tax credit is seen as one option for securing his backing for a broader extenders package.

According to a report to be released today by FTI Consulting, extending the biodiesel break by next year would add $15 billion in agricultural revenues and support 30,000 new jobs on average across the U.S. economy.

Before the August recess, Grassley said discussions were ongoing with the House Ways and Means Committee about extenders, which he’d like to add to the next spending bill that replaces the current stopgap measure when it expires Nov. 21 (E&E Daily, Sept. 26).

While House Ways and Means Chairman Richard Neal (D-Mass.) promised in June to mark up a green energy package before the end of the year, energy legislation was not among the bills the panel announced will be marked up this week.