Nearly $2T stimulus package omits direct renewable sector aid after Trump, McConnell opposition

Source: By Catherine Morehouse, Utility Dive • Posted: Thursday, March 26, 2020

  • Relief for the renewable energy sector was not included in the $2 trillion support package the Senate unanimously passed on Wednesday.
  • Despite a push from Democratic Senators and clean energy leaders to include tax credit extensions and other provisions in the package, Senate leadership chose instead to focus on healthcare and broader economic aid.
  • But industry stakeholders say several of the broader economic provisions could provide employment and other relief to the sector, and there is still opportunity for inclusion in inevitable future federal legislation that will be needed to address the industry-wide impacts of the COVID-19 pandemic.

Dive Insight:

Eighteen Democratic senators sent a letter to Senate leadership late Friday night, urging them to include relief for the clean power industry. But their efforts were not well-received by Republicans, who said such proposals were “unrelated” to the broader economic issue at hand.

“Why are Democrats filibustering the bipartisan bill they helped write?” Senate Majority leader Mitch McConnell asked on the floor Monday, criticizing the Democrats’ efforts to include renewable energy tax credit extensions and require airlines at the center of bailout discussions to cut emissions.

“Are you kidding me? … Democrats won’t let us fund hospitals or save small businesses unless they get to dust off the Green New Deal,” he said.

President Donald Trump was also critical of the Democrats’ move to include renewables and emissions cuts on Twitter and in an interview with Fox News.

This is not about the ridiculous Green New Deal. It is about putting our great workers and companies BACK TO WORK!

— Donald J. Trump (@realDonaldTrump) March 24, 2020

But Wednesday’s consensus put climate conversations on hold. Republican-led efforts to aid the oil and gas industry by purchasing oil to fill the Strategic Petroleum Reserve were also not included.

The bill as it stands will create a $367 billion loan program for small businesses, deliver $500 billion in corporate aid and give $1,200 to individuals making less than $75,000 per year, among other measures.

“This is not a moment of celebration but rather one of necessity,” Senate Minority Leader Chuck Schumer said in a letter to Democrats announcing the agreement. “Like all compromise legislation, this bill is far from perfect. There are many issues that could have and would have been resolved differently if Democrats were in the majority.”

But power sector leaders remained largely positive about the omission, agreeing that the sweeping economic bill could provide much-needed healthcare and unemployment aid to some of the workers most impacted by the impending global recession in the short-term.

“As Congress continues to address the ongoing COVID-19 crisis, we appreciate that they are prioritizing relief for families and small businesses. There are several elements in this legislation that can help solar businesses and solar workers, including long-term unemployment insurance, business loans and provisions that support employee retention and other employee protections,” Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA) said in a statement.

There are also opportunities for business loans under the Senate’s final version that could help keep budding industries afloat.

“Every small business in clean power should be asking for a small business loan under the terms of the new legislation,” Reed Hundt, who served on the Obama Administration’s Transition Team during the 2008 financial crisis and is now founder and CEO of the Coalition for Green Capital, told Utility Dive.

And the advancement of this stimulus package does not mark the end of federal economic relief, Hundt and other power sector leaders noted. The next step will be for Congress to spur economic growth, and renewable energy leaders hope that involves jumpstarting projects and rebuilding jobs.

“Congress is going to need to pass a ‘Get America working again’ law,” said Hundt. “We’re going to have about 10 million unemployed and at least a million need to get new jobs in the clean energy sector.”

The power sector, particularly construction and manufacturing projects, is one area where hypothetically workers would be able to get on the ground fast, because it involves less direct human contact, he said.

Broadly, the pandemic is putting billions of dollars at risk in the U.S. renewable energy sector, thanks to supply chain disruptions, project delays, and workforce shortages, according to a recent American Council on Renewable Energy survey.

The solar industry is at risk of losing half the sector’s jobs — 125,000 — while the wind industry has cited the potential loss of 5,000 U.S. jobs, $43 billion of investment, and $8 billion in rural tax benefits.

“While we’re disappointed clean energy sector relief did not make it into the phase three stimulus package, we will continue working with Congress and other renewable energy leaders to find solutions to the specific challenges COVID-19 is causing our members,” Tom Kiernan, CEO of the American Wind Energy Association said in a statement.

In particular, renewables advocates are hoping to continue securing federal incentives to build out projects, which in turn will create job growth, SEIA’s Hopper told Utility Dive.

“Most importantly, what the solar industry needs from Congress right now is a way to utilize the benefits that they’ve already given us. As we think about the investment tax credit, it’s predicated on the availability of tax equity in these uncertain times when our economy seems to be retracting,” Hopper said. “So we’re asking Congress to make our tax credit either refundable, or a direct pay option,” along with extending safe harbor provisions to ensure projects whose timelines are interrupted can still receive tax benefits.

AWEA and Advanced Energy Economy have made similar cases on the premise that the end cost to the federal government would be the same.

“Making these adjustments to existing tax credits would provide the industry the flexibility needed to accommodate COVID-19 delays, without costing the Federal government any additional money,” said Kiernan.