Industry and Democrats seek to add renewable energy tax credits to fast-moving pandemic stimulus bill 

The clean energy sector has a message for Congress as lawmakers work on a major stimulus to stop the economic bleeding from the coronavirus outbreak: Don’t forget us.

Wind, solar, storage, and other renewable energy developers are seeking emergency relief from Congress as they worry supply chain disruptions due to the coronavirus pandemic will delay shovels in the ground for new projects, preventing them from taking advantage of soon-expiring tax credits.

Other low-carbon technologies, including carbon capture and storage developers, are seeking similar relief, especially as the tax equity markets they rely upon are frozen amid the economic fallout from the pandemic.

Wind and solar trade groups are also positioning their industries as ones that can help restore the economy in the medium- and longer-term, in hopes a stimulus package could include extensions to federal tax incentives that expire in the next couple years.

Extending those credits “would allow our member companies to hire thousands of additional workers and inject billions into the U.S. economy,” the presidents of the Solar Energy Industries Association and the American Wind Energy Association wrote lawmakers in a letter Thursday.

The requests from low-carbon industries come as environmental groups and some energy analysts say Congress should pour money into clean energy â€“ both as a way to create new jobs and to ensure the country’s response to the near-term crisis of coronavirus doesn’t jeopardize efforts to address the long-term challenge of climate change.

“[W]e have an opportunity to use stimulus measures to boost growth following the COVID-19 health crisis to both curb air pollution and help address the climate crisis,” said Helen Mountford, vice president of climate and economics for the World Resources Institute, in a post Tuesday. “We cannot punt the climate emergency down the road.”

Congress and the White House are working on a $1 trillion stimulus package, and Senate Majority Leader Mitch McConnell has said the Senate won’t stop working until this next phase of federal assistance for coronavirus damages is complete. This phase is expected to include direct assistance for major industries heavily affected by the coronavirus outbreak and related restrictions, including the airline industry.

Already, several House Democrats have signaled they will push for extensions of the wind and solar tax credits to be part of any stimulus package,

“Including these credits will help us address both the economic slowdown we are facing as a result of COVID-19 and the ongoing climate crisis,” said Rep. Gerry Connolly of Virginia, Rep. Paul Tonko of New York, and Rep. Doris Matsui of California in a statement. The three lawmakers head the House Sustainable Energy and Environment Coalition.

“As leaders, it’s our responsibility to make sure we are protecting Americans from the impacts of this pandemic and the impacts of climate change,” they added. “We can’t relax on either front.”

But it isn’t clear yet whether a deal could be struck. Lawmakers are facing pressure to quickly put together and pass the $1 trillion package to start getting money into the hands of Americans and businesses struggling as the coronavirus pandemic has caused travel restrictions, forced restaurants and retail stores to shut their doors, and led companies to lay off workers.

Senate Democrats haven’t said publicly whether they will also advocate for renewable or clean energy tax credit extenders as part of the stimulus, even Oregon Senator Ron Wyden, who led an amendment to extend the credits to the energy bill the Senate was considering just a week ago. Wyden’s staff declined to comment on whether the senator would advocate for extensions in the stimulus discussions.

Clean energy critics, though, are accusing Democrats of trying to weigh down urgently needed stimulus money with climate change policies.

Including clean energy tax credits “will do nothing to stimulate the economy or help anyone’s general health, and will only line the pockets of renewable energy companies,” said Tom Pyle, president of the American Energy Alliance, in a statement.

“The Democratic leadership should immediately admonish those in their party who are attempting to use this crisis to reward their green cronies,” he added. “It is the height of irresponsibility and an insult to each and every American.”

For now, renewable energy and carbon capture developers are asking Congress to take steps to ensure pending projects don’t miss opportunities to qualify for tax credits.

A coalition of renewable energy trade groups is asking lawmakers to include the “prompt repair and extension of critically important tax incentives” in any broader economic package to address economic harms from the coronavirus pandemic.

The sector’s growth has been “placed at risk by a range of COVID-19 related impacts,” write the groups, including the American Council on Renewable Energy, as well as groups representing solar, wind, energy storage, and hydropower, in a letter to top lawmakers in both chambers Thursday.

The renewable energy groups say that they are facing economic risks from the virus, particularly amid disruptions to the industry’s global supply chain that could delay the construction of projects. That’s especially important as deadlines for those tax credits begin to expire, and they’re asking for several emergency measures to ensure those credits don’t go to waste.

The groups’ new letter includes an urgent request for Congress to extend the beginning construction and safe harbor deadlines companies must meet to qualify for the federal incentives. That extension should be a minimum of one year for commence construction and placed-in-service deadlines, said Bill Parsons, chief operating officer of the American Council on Renewable Energy, in a statement. He urged lawmakers to include “refundability for renewable tax credits during that time.”

In their letter, the coalition is also calling on Congress to enact a “direct pay tax credit for stand-alone energy storage, to foster renewable growth and help secure the more resilient grid we need in these difficult times.”

The solar and wind groups, in their separate letter, also asked for a “direct pay” option for their tax credits.

Carbon capture advocates are asking for similar assistance. In a statement Thursday, the Carbon Capture Coalition urged lawmakers to include “direct pay” for the so-called 45Q tax credit for the technology, as well as extend the deadline for the credit by at least five years. The coalition has a broad membership that includes coal producers, oil and gas companies, and manufacturers, as well as several environmental groups.

Without those steps, the concern is that projects that have already been announced or that are under development will be put on pause or be canceled altogether, said Brad Crabtree, vice president of carbon management for the Great Plains Institute who co-convenes the Carbon Capture Coalition. He noted these are steps Congress can take within the context of a stimulus that wouldn’t require “large amounts of additional dollars.”

To qualify for the 45Q tax credit, projects must commence construction by Jan. 1, 2024, still a couple years out but a relatively short time frame for capital intensive projects like carbon capture facilities.

Carbon capture developers are also facing delays as the Treasury Department has been slow to issue guidance outlining how it will implement the tax credit program, which Congress expanded in 2018.

For carbon capture advocates, it’s important that the technology get the same treatment as wind and solar. Crabtree said the coalition has been in close contact with offices of Democratic and Republican lawmakers who back carbon capture, all of whom want to see policy “parity” if Congress addresses the clean energy tax credits in any stimulus package.