US clean energy industry business leaders slam proposal to repeal tax credits

Electricity prices and project costs will skyrocket and it will be a struggle to fill the gap of increasing electricity demand, if the proposal to phase out the Inflation Reduction Act clean energy tax credits passes, industry experts said May 13.

A US House of Representatives reconciliation proposal, revealed May 12, would phase out or alter several key clean energy tax credits.

"We're looking at this text very closely that just came out of the Ways and Means Committee," Robert Neifert, director of business development at Solar Gain, said during a press call that Clean Energy for America hosted.

If the tax credits are phased out, it will have an impact on energy projects for years, said Jon Carson, managing partner at Trajectory Energy.

"I think there's going to be a real debate of cutting these energy tax credits so that billionaires who live in big cities can get their tax cuts," Carson said. "I think it's going to be a real robust debate over the coming months of what our priorities are."

American energy dominance

"I share Trump's goal for American energy dominance," said Gilbert Campbell, founder & CEO of Volt Energy Utility. "In order to achieve that goal, though, it is critical that Congress maintains these energy tax credits that are allowing great-paying jobs. They're supporting small businesses ... and promoting healthier communities. We must maintain these tax credits and make sure that we're ushering an era of American energy dominance."

The tax credits have helped more domestic projects get built and domestic manufacturing come back, Campbell said, adding that repealing the tax credit would cut hundreds of thousands of jobs.

"Repealing these energy tax credits also causes uncertainty in the market, which makes it very difficult ... to be able to do business," Campbell said about corporate buyers, financiers, investors, and projects. "The uncertainty of not knowing where the tax credit is going to be causes a lot of issues, and just preserving what we have now will continue to lead to energy dominance."

Bipartisan issue

"Math is math," Carson said. "Math is not partisan, and to pay for the extension of the Trump tax cuts, they needed a ton of money, so I think what you see is an attempt at a bit of a compromise there."

A vast majority of renewables are being developed in red states, Campbell said.

"This should be a nonpartisan issue," Campbell said. "America winning energy dominance benefits all Americans."

Solar dominance

"We think the timing is wrong and it doesn't align with the goal that solar really can be the fastest deployed new electricity generation," Neifert said, adding that batteries are turning solar into a firm power resource, which is a new evolution of the industry. "I would hate to see the progress of virtual power plants and big batteries attached to big solar projects be cut off at the knees before they're even started."

Solar is one of the few resources that can [be] developed quickly to address things quickly, said Brett Isaac, CEO and founder of Navajo Power. He advocates for a strong defense of the credits because they are showing an effect in rural America and in tribal nations.

If the proposal passes as is, about 10%-20% of residential projects will still be viable without the tax credit, Neifert said, adding that costs for batteries, which have the biggest opportunity right now, just started decreasing and are now going up.

What's next?

"We hope there will be additional amendments and modifications to the current language," Neifert said.

The proposal will head to the US Senate next. The final version will likely look different, said Bryant Jones, CEO of Geothermal Rising, adding there are 12 topics that don't have enough support to pass.

Some have discussed splitting the billing into two or more bills, although Jones said, "Trump wants one beautiful bill."