White House touts wind, solar tax credits to curb emissions

Source: Umair Irfan, E&E reporter • Posted: Wednesday, February 24, 2016

The White House yesterday spiked the ball in the end zone, cheering a new report from the National Renewable Energy Laboratory finding that the resurrection of key renewable energy incentives could curb more than a billion tons of carbon dioxide emissions.

The study paints a rosy picture for the wind and solar industry in the United States, despite policy setbacks like the Supreme Court’s ruling this month to freeze the Obama administration’s signature climate change regulation, along with state slowdowns on renewable portfolio standards and incentives like net metering.

“We’ve made unprecedented progress in deploying renewable energy,” Dan Utech, deputy assistant to the president for energy and climate change, told reporters yesterday. “Meeting the Paris commitments will require scaling up low-carbon solutions, including wind and solar, at an unprecedented pace.”

As for the stay of U.S. EPA’s Clean Power Plan, Utech said he is optimistic about its legal standing. “We want to get a decision on the merits as fast as possible,” he said.

Congress renewed the production tax credit for wind energy and the investment tax credit for solar energy late last year as part of a bipartisan budget deal. The precarious cliff of congressional renewal is now a ramp. The incentives will now taper off slowly over the end of their five-year extension.

The Department of Energy estimates that the renewable energy sector will hit crucial price and performance thresholds during this period, like solar energy reaching cost parity with conventional energy sources without subsidies.

The NREL study looked at how renewable energy would play out in light of the tax credits, setting the price of natural gas as a key variable. Around the start of the next decade, the report estimated that the tax credit extensions would drive 48 to 53 gigawatts in increases in installed renewable power.

Currently, there are more than 24 GW of solar capacity and more than 65 GW of wind capacity in the United States.

As the tax credits fade away, economies of scale and price reductions will continue to drive renewable energy deployment, according to the report. Between 2016 and 2030, the incentives will avert between 540 million and 1,400 million metric tons of carbon dioxide, depending on the price of natural gas.

According to the U.S. Energy Information Administration, the United States produced 5.4 billion metric tons of carbon dioxide from the energy sector in 2014, the most recent numbers available.

Industry leaders were grateful for the incentives.

“It was very important to get that production tax credit extension,” said Tom Kiernan, CEO of the American Wind Energy Association.

As for the report, Kiernan said, “It is consistent with our sense of the industry.”

NREL’s study was especially good news for the Solar Energy Industries Association, which expects to reach 100 GW of solar power in the United States by 2021, more than quadrupling the current installed capacity (ClimateWire, Feb. 22).

“We’re thrilled that we have this long-term extension,” said Rhone Resch, president and CEO of SEIA.