The Energy 202: House Democrats push aid for wind and solar in new infrastructure bill

House Democrats are trying to throw a lifeline to wind and solar developers struck hard by the coronavirus pandemic.

House Speaker Nancy Pelosi (D-Calif.) and other Democratic leaders included extensions of tax breaks long sought by the renewable energy sector as part of a $1.5 trillion infrastructure package.

The decision to include them is a victory for environmentalists and environmentally minded Democrats in Congress, who had pressed for more aid to the clean energy sector, which has lost 620,000 jobs since the start of the pandemic.

But the move also sets up a fight with congressional Republicans, who in the past have resisted efforts to extend the renewable tax credits. It's unlikely to pass in its current form in the GOP-controlled Senate.

The legislation would give wind and solar developers more time and flexibility to take advantage of the tax incentives.
The infrastructure bill, called the Moving Forward Act, extends a tax break for onshore wind developers for five years and one for solar developers for six years. 

It would also allow those renewable energy companies to receive the credits as direct payments, rather than only being able to use them to lower their tax burden. 

That change is important, renewable energy advocates say, since solar and wind farm backers may not make enough money from other investments during the downturn for a lower tax bill to be worthwhile.

“Providing a direct payment for the credits is especially crucial as the wind industry works to withstand the enormous challenges caused by the COVID-19 pandemic,” Tom Kiernan, head of the American Wind Energy Association, said in a statement.

For years, the tax breaks have helped drive the adoption of wind and solar energy, which today make up about 9 percent of the nation’s electricity mix. Both tax breaks be completely phased out by the end of 2021.

In general, the renewable energy sector applauded the bill. 

“We know that with the right policies in place,” said Abigail Ross Hopper, president of the Solar Energy Industries Association, “clean energy can add hundreds of billions of dollars in investment and perhaps a million or more jobs back into the economy.”

Other technologies that have yet to take off in the United States, such as carbon capture and offshore wind, also would get enhanced tax credits as part of the bill.

The package includes $70 billion for updating the electric grid to accommodate more renewable energy, develop a charging network for electric vehicles and improve the energy efficiency of buildings, among other measures.

Many Democrats are clamoring for the House to do more to help renewables during the pandemic.

In a letter last week, eight leaders of the House Sustainable Energy and Environment Coalition told Pelosi and other Democratic leaders the emergency payroll loans for small businesses were not enough to save the jobs of many solar panel installers and wind turbine technicians.

“[I]t’s hard to keep workers on payroll even with federal support when the projects employees would return to are collapsing,” they wrote. 

And the Sierra Club needled Rep. Richard Neal (D-Mass.) chairman of the powerful tax-writing Ways and Means Committee, in particular to include the wind and solar tax credits in the next coronavirus stimulus.

Until the text of the bill was released Monday, it was unclear whether the tax credits would be included.

In the past, Republicans rejected efforts to include extensions of the tax credits during negotiations for both an end-of-year spending bill and a coronavirus relief package in March. 

At one point, Senate Majority Leader Mitch McConnell (R-Ky.) accused Democrats of letting their concerns about climate change get in the way of coronavirus relief.

“Democrats won’t let us fund hospitals or save small businesses unless they get to dust off the Green New Deal,” McConnell said on the Senate floor.

Pelosi said she will bring the infrastructure bill to a vote before July 4. Even she acknowledged how difficult it would be to get the bill through the Senate, saying McConnell would kill it.

“As you know, the Grim Reaper has said nothing is ever going any place in the Senate, but there is tremendous interest in the country in rebuilding the infrastructure,” Pelosi told reporters last week.