Was there a ‘seismic shift’ for renewables? It’s complicated

Source: Christa Marshall, E&E News reporter • Posted: Tuesday, November 20, 2018

The midterm elections created a “seismic shift” for renewable power.

At least that’s what some industry leaders think, based on what they’ve heard in Congress and from state officials.

At a Washington event Friday, the Solar Energy Industries Association, American Council on Renewable Energy and environmental policy firm Energy Innovation outlined their goals for the next Congress, including plans to push for an investment tax credit for energy storage. They are also optimistic there will be bipartisan support for an infrastructure package and think Sen. Chuck Grassley (R-Iowa), the father of the wind production tax credit, could be favorable to their issues at the helm of the Senate Finance Committee.

“That’s a great thing for the renewable sector,” Gregory Wetstone, president of ACORE, said about Grassley leading the committee.

Abigail Ross Hopper, president of SEIA, said her organization has been “working hard” recently to get an investment tax credit in place for storage, considered a critical technology to back up intermittent solar and wind.

“I know there’s bipartisan support for it,” she said. If something doesn’t move in the lame-desk session, then she expects it will in the new Congress.

A tax extender package could also help renewable technologies like geothermal and biomass that were left out in previous tax credit legislation, Wetstone said.

Rep. Earl Blumenauer (D-Ore.), a senior member of the Ways and Means Committee, told E&E News last week that Democrats would revisit the tax issue when they take control of the House in January if they don’t like GOP proposals (E&E Daily, Nov. 16).

Hal Harvey, CEO of Energy Innovation, said he had met with two dozen Democratic members of Congress in the past week. They were all looking for “accessible, incremental” policies on clean energy that could find favor in the Senate, he said.

“I think we’re going to see some comity between the parties to get some incremental things done,” he said.

Renewable industries are looking to possible infrastructure legislation as a venue to support new transmission lines, batteries and other technologies that could deploy more projects.

It’s also possible that increased oversight from Democrats, and higher expected Department of Energy research dollars in House appropriations legislation, could boost support for wind, solar, efficiency and low-carbon technologies (Greenwire, Nov. 1).

Harvey and Wetstone said that likely new oversight in the House could lead to “friendlier” policies from the Trump administration.

“The agencies can’t be politicized the way they have been,” Harvey said.

Yet congressional politics can be messy, and it’s not clear there would be support for a storage element in any tax package.

Nevada Sen. Dean Heller, who lost his seat this month, was the only Republican co-sponsor of a bill that would establish investment tax credits for residential and business energy storage. Heller currently is the chairman of the Senate Finance Subcommittee on Energy, Natural Resources and Infrastructure.

American Energy Alliance President Tom Pyle, who led President Trump’s Energy Department transition team, said he expected a tax extender package could move in the lame duck, but it’s unlikely that new ideas would make it in there.

“I don’t know that, unless everything is already ripe, that we’re going to see anything earth-shattering or new,” he said in a phone interview. “Unless it’s already baked in the cake, I don’t see them making a lot of new ground between now and lame duck.”

Nick Loris, an economist at the conservative Heritage Foundation, said he wasn’t sure tax legislation could move unless “long-lasting, meaningful regulatory reform” is tacked on.

There’s a lot of speculation about next year, and there are Republicans who could support an infrastructure package and tax credits, but a lot depends on how things shake out with Trump and progressive Democrats, Pyle said. Trump is unpredictable, and it’s still unknown how he’s going to respond to the House being under Democratic control.

“Everyone keeps saying [infrastructure] is the one avenue for bipartisanship,” Pyle said. “But it’s hard for to me imagine that the Democrats are going to want to sing kumbaya with President Trump.”

“What really is the question, are they going to want to notch bipartisan victories, and sort of neutralize anti-Trump messages?” Pyle asked.

Divisions are emerging in the Democratic Party between segments who want 100 percent renewables and a “Green New Deal,” and others who are looking to make modest policy changes (Greenwire, Nov. 16).

Some committee shifts also could have a downside for renewable industries. With the loss of Sen. Bill Nelson (D-Fla.), there’s speculation that Sen. Maria Cantwell (D-Wash.) could become the ranking member on the Senate Commerce, Science and Transportation Committee, potentially making West Virginia Sen. Joe Manchin the top Democrat on the Senate Energy and Commerce Committee.

Considering Manchin’s focus on coal, “that’s not exactly the ideal scenario for renewable power,” Wetstone said.

‘Where it’s really happening is the states’

Regardless of what happens in Congress, the renewable sector sees huge opportunities at the state and regional levels.

“Where it’s really happening is the states,” Wetstone said.

Democrats won control of all branches of government in Colorado, New Mexico and Nevada. In each of those states, the gubernatorial winners pushed for at least 50 percent renewable standards, with Colorado’s Gov.-elect Jared Polis calling for 100 percent renewable power by 2040.

A ballot measure in Nevada calling for 50 percent renewables by 2030 passed (Energywire, Nov. 7).

Democratic gubernatorial wins in Illinois, Kansas, Maine, Michigan, New Mexico and Wisconsin also could help growth, Wetstone said.

In Maine, for example, Gov.-elect Janet Mills campaigned on expanding offshore wind and solar and reducing carbon pollution by 80 percent. In Illinois, Gov.-elect J.B. Pritzker supported the idea of 100 percent renewable energy. SEIA is projecting that solar could grow at least tenfold in the state in the next decade.

Advocates are emboldened by the fact that candidates who campaigned on clean energy in previous elections acted quickly when in office.

Wetstone pointed to New Jersey Gov. Phil Murphy (D), who won the 2017 gubernatorial election. A year later, he signed legislation increasing the state’s renewable portfolio standard.

Similarly, Virginia Gov. Ralph Northam (D) released a plan this year calling for 3 gigawatts of solar after winning the 2017 governor’s race. In other cases, new governors reversed policies of predecessors, suggesting that could happen again.

In the past 18 months, state legislatures passed renewable energy initiatives with bipartisan support that were vetoed by GOP governors, Wetstone noted.

In March, outgoing New Mexico Gov. Susana Martinez (R) pocket vetoed a bill that would have restored a tax credit to offset costs of small solar energy, for example. In Maine, outgoing Gov. Paul LePage (R) vetoed a bipartisan bill that would have expanded solar development and placed a moratorium on new wind energy projects in western and coastal Maine, Wetstone said.

“We expect this to be reversed by incoming Governor Mills,” an ACORE document states.

Ultimately, congressional and state policies are not the only factors affecting the future of renewables. Everything from natural gas prices to trade policies play a role. SEIA, for instance, has been strongly opposed to tariffs Trump enacted in January on solar cells and modules.

To reverse that, the focus is not just on politics, Hopper said. Instead, there’s a push for some companies to get exemptions from the fees, and an upcoming review before the International Trade Commission.

In cases where politics is important, there’s a need for bipartisanship, she said, noting that many of the solar industry’s biggest supporters are Republicans.

“I don’t want to put too blue of a gloss” on the elections, Hopper said.

Reporter Maxine Joselow contributed.