Library filed under Taxes & Subsidies
The Trump administration is making it easier for renewable energy projects to take advantage of certain tax credits amid the coronavirus pandemic. The Treasury Department and Internal Revenue Service issued a notice Wednesday that said it would give some companies that started construction in 2016 or 2017 an extra year before they have to put their projects in service.
Some industry trade associations and green groups appear content to wait for a future aid bill. But other clean energy backers say the House Democrats' latest $3 trillion bill blows another chance to help the ailing sector and at the same time push one of the party's top policy priorities of addressing climate change — and they're tired of waiting until next time.
The Interior Department had stopped charging the rents at the end of 2018 to review company complaints that former President Barack Obama’s administration had increased them too much, making them uncompetitive with rents on private property. The Interior Department declined repeated requests to comment on the outcome of that review, or the issuance of the retroactive rent bills. A budget document on the Interior Department’s web site shows it expects to collect $50 million in rent fees for wind and solar projects in 2020, up from $1.1 million in 2019 and $21.6 million in 2018.
At least ten wind and solar projects from companies, many Chinese, including Goldwind and Power China, and the Argentine Genneia and Petroquímica Comodoro Rivadavia (PCR) halted construction or commissioning due to the recent quarantine. These projects represent more than 1,000 GW of energy, according to company estimates.
China’s curious role in support of taxpayer wind energy subsidies in the U.S. is now raising suspicion, as Grassley tries to convince Trump Administration officials that their COVID-19 stimulus measures should include a boost to his beleaguered wind program.
An extension is likely to benefit wind energy projects primarily. Wind farms currently can claim a tax credit worth 1.5 cents for every kilowatt-hour of electricity produced if they break ground before Jan. 1, 2021.
Prices often drop below zero when there is excess wind and solar generation in the market, but fossil and nuclear power plants fail to throttle their output even though their generation costs are higher and renewables have priority grid access. This may be because a complete shutdown of conventional generation plants followed by a restart would cost operators more than continuing production at negative prices, or continued operation is required to supply district heating.
“Big wind does not have a COVID problem. It has a mismanagement problem,” Linowes told Texas Business Coalition. “Before the March 14 COVID shutdown, the industry was already reporting that 9,000 megawatts of 2016 safe-harbored turbines were expected to spill into 2021. This 9,000 megawatt spillover has nothing to do with COVID and everything to do with mismanaging delivery and construction timelines. Developers and (Iowa Sen. Charles) Grassley are shamelessly demanding taxpayers assume the price tag of their mismanagement. Such behavior should not be rewarded at our expense.”
House Democrats have mostly stopped insisting that emergency relief bills address climate. Renewable energy industries, once poised for a banner year, are now just trying to hold on to what they have rather than push lawmakers for more.
At the top of the list of craven business interests that angled for federal preferment was the wind and solar industries. Those who follow the news will remember that congressional Democrats, serving their green energy masters, worked hard to include language in the third (and biggest) coronavirus relief bill aimed at advancing key elements of the Green New Deal. ...When Americans began asking the obvious question — what does a pandemic and a recession have to do with carbon emissions? — the Democrats backed down. Now, they're back, salivating at the prospect of a fourth stimulus bill.
After a decade of dramatic ups and downs, 2020 was supposed to be a peak year for U.S. wind farm construction. Instead, with the coronavirus pandemic rattling supply chains and thinning workforces, things could get messy for an industry that should be taking a victory lap. Developers are poring over force majeure provisions in their contracts. Investors are nervous. Without political relief, projects could get canceled outright, industry figures say — and relief in Washington, D.C. looks anything but certain.
“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.”
TOPEKA, Kan. – Reversing a state appeals court, the Kansas Supreme Court ruled Friday that utilities cannot charge higher rates for customers who partially produce their own energy via solar or wind power.
The Bundesrat’s bill, adopted on 14 February, aimed at suspending penalties for wind turbines that do not meet completion deadlines. According to Germany’s Renewable Energy Sources Act (EEG), wind farm promoters must pay penalties if the project won in a tender is not completed within two years. The fine applies regardless of the reason for the delay,
Instead, they’re focusing on two key concepts. The first is extending "safe-harbor" deadlines for receiving the credits that may be thrown off track by the pandemic’s economic disruptions. The safe-harbor fix could potentially be made by the Treasury Department, without a need for congressional action. The second is allowing renewable projects to receive some of their tax credit value back as refundable credits or via "direct pay" provisions.
Wind and solar developers are asking for more time to get projects in service and still collect the full value of renewable energy tax credits that are set to begin phasing down next year. ...Some renewable advocates are asking Congress for direct payments from the Treasury in lieu of the existing tax credits.
That Congressional Democrats would push so hard for solar and wind subsidies at such a critical time for the US economy is particularly galling for two reasons. First, the wind industry already stands to collect some $33.75 billion in subsidies between now and 2029. Second, wind-energy development in some of the most-heavily Democratic states in the country — Hawaii, California, New York and Vermont — has been effectively stopped due to local opposition.
Environmentalists and clean energy industry groups were largely left out of the massive coronavirus stimulus bill that passed the Senate yesterday, but they're holding out hope Congress will heed their calls for help in future relief bills. The contours of how the next phase of COVID-19 aid will play out are unclear, with staff exhausted from days of negotiations and many lawmakers already uneasy about gathering again in Washington to vote on legislation.
Democrats were “bargaining as business as usual,” McConnell said Tuesday, with “counter-offers that demanded things like new emission standards or tax credits for solar panels.”
The U.S. Senate reached an agreement on a $2 trillion coronavirus stimulus bill early Wednesday morning, but the package does not include the tax credit extensions and direct pay provisions sought by the wind and solar industries to help them weather the supply-chain and economic disruptions caused by the global pandemic.