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COVID-19 threatens tax credits for billions in sun, wind energy projects

“We’re thankful that Congress rolled out the Phase Three relief program because the nation’s economy needs strong action to respond to the COVID-19 pandemic,” Kiernan said. “It’s unfortunate that we weren’t included in the package, and we’re beginning the process of reiterating our ask to be included in the Phase Four bill that will likely be drafted.”

Construction delays from COVID-19 have wind and solar energy developers concerned about losing tax credits that expire if projects aren’t completed on time.

The projects at risk represent about $35 billion in investment, 35,000 jobs and about $8 billion in rent payments for landowners and state and local taxes, said John Hensley, vice president of research and analytics for the American Wind Energy Association.

The tax credits for wind and solar projects are time sensitive, containing preprogrammed step-downs in their value. To get the full credit, a project must be completed and online within four years. For example, a project started in 2016 needs to be online providing energy by 2020.

This year was set up to be a big one for wind installation, Hensley said. Tax credits for about 25 gigawatts of wind energy development projects are at risk. It takes 412 utility-scale wind turbines to produce 1 gigawatt of power, which is enough to power 190 homes. Hensley said

Kansas is one of the nation's top five wind energy producers, with 6,128 MW of wind power already installed and an additional 871 MW under construction. Missouri has 959 MW... more [truncated due to possible copyright]  

Construction delays from COVID-19 have wind and solar energy developers concerned about losing tax credits that expire if projects aren’t completed on time.

The projects at risk represent about $35 billion in investment, 35,000 jobs and about $8 billion in rent payments for landowners and state and local taxes, said John Hensley, vice president of research and analytics for the American Wind Energy Association.

The tax credits for wind and solar projects are time sensitive, containing preprogrammed step-downs in their value. To get the full credit, a project must be completed and online within four years. For example, a project started in 2016 needs to be online providing energy by 2020.

This year was set up to be a big one for wind installation, Hensley said. Tax credits for about 25 gigawatts of wind energy development projects are at risk. It takes 412 utility-scale wind turbines to produce 1 gigawatt of power, which is enough to power 190 homes. Hensley said

Kansas is one of the nation's top five wind energy producers, with 6,128 MW of wind power already installed and an additional 871 MW under construction. Missouri has 959 MW installed with 479 MW under construction.

Tom Kiernan, CEO of the American Wind Energy Association, has been trying to get Congress to include an extension on the credits in its stimulus packages but so far has been unsuccessful.

“We’re thankful that Congress rolled out the Phase Three relief program because the nation’s economy needs strong action to respond to the COVID-19 pandemic,” Kiernan said. “It’s unfortunate that we weren’t included in the package, and we’re beginning the process of reiterating our ask to be included in the Phase Four bill that will likely be drafted.”

Kiernan said he’s not asking for new credits, just an extension of time on the credits already applied to offset COVID-19's effects.

Rob Freeman, president of Kansas City-based solar energy developer Savion LLC, said the tax credits are key to the success of development projects already underway that would have been completed on time if not for the pandemic.

“It’s important to understand that a lot of contracts have been signed and a lot of investment made, assuming these tax credits would be usable, so it’s a big deal,” Freeman said. “We’re seeing examples of delays impacting our projects. A lot of the government agencies we use to review projects and issue permits are either closed down right now or not operating at 100%. The same is true for the regional transmission companies that manage the grid, which we need access to. Delays associated with COVID-19 jeopardize the value of the tax credits on the pending transactions. So it’s fair to say that for the solar industry, the number one priority in terms of what the industry needs to have happen is to minimize the impact of COVID-19.”


Source: https://www.bizjournals.com...

APR 6 2020
http://www.windaction.org/posts/51109-covid-19-threatens-tax-credits-for-billions-in-sun-wind-energy-projects
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