Democrats in the U.S. House of Representatives reintroduced a bill to extend tax credits for certain renewable energy and carbon capture projects while also expanding credits to include energy storage technologies.
The Growing Renewable Energy and Efficiency Now, or GREEN, Act, which was first introduced in June 2020, seeks to expand renewable energy deployment in the interest of climate change mitigation. Democrats on the House Ways and Means Subcommittee on Select Revenue Measures described the bill as a "comprehensive use of the tax code to combat the threat of climate change," in a Feb. 5 release.
"Climate change is the most pressing issue of our time and we must act boldly to address this existential threat," subcommittee Chairman Mike Thompson, D-Calif., said. "This bill expands the use of renewable energy through federal tax incentives that will promote clean energy technologies and faster deploy zero-emissions vehicles. These incentives will, in turn, shift our energy use and lessen our carbon footprint, dramatically reducing greenhouse gas emissions."
If passed, the bill would extend the investment tax credit for solar energy at 30% through 2025 before phasing down to 26% in 2026, 22% in 2027 and then 10% from there, according to a summary of the proposed legislation. It would also extend the 30% investment tax credit for offshore wind property through 2026. The production tax credit for marine and hydrokinetic renewable energy facilities would be extended through 2026 as well.
Additionally, the GREEN Act would expand the 30% investment tax credit to include energy storage technologies with a minimum capacity of 5 kWh through 2026.
The proposal would preserve the wind production tax credit's 60% phaseout level through 2026.
The bill builds off of the bipartisan stimulus package Congress passed in December 2020. That legislation created a 30% investment tax credit for offshore wind projects that began construction between 2017 and 2025 and extended the 26% solar investment tax credit by two years to 2022 before the percentage declined, according to American Clean Power Association. That 2020 package had also contained a one-year extension to the onshore wind production tax credit.
For carbon capture and sequestration project developers, the GREEN Act includes a one-year extension for the 45Q tax credit to include facilities that begin construction by the end of 2026. It contains a direct-payment option for developers as well, a provision the Carbon Capture Coalition welcomed in a release.
However, coalition director Brad Crabtree called for a multiyear extension of the 45Q tax credit, noting that it is "critical to secure the long-term financial certainty and investment horizon required to scale carbon capture, direct air capture and carbon utilization technologies to meet midcentury climate goals."
"We know from the successful commercialization of wind, solar and other low and zero-carbon technologies that the availability [of] tax credits over many years is critical to leveraging significant private capital investment and realizing widespread project deployment," Crabtree said. "Sustained deployment policies lead to further innovation and cost reductions that drive still greater project development."
The GREEN Act would also require the U.S. Department of Treasury to assess the U.S. Environmental Protection Agency's greenhouse gas reporting program, which calculates taxpayers' greenhouse gas emissions and levies a corresponding fee.
The bill includes a qualified environmental justice program credit as well, which seeks to promote environmental justice programs in higher education institutions, especially Historically Black Colleges and Universities.
"Qualifying [environmental justice] programs shall be designed to address or improve data about environmental stressors for the primary purpose of improving or facilitating the improvement of health and economic outcomes of individuals residing in low-income areas or areas populated disproportionately by racial or ethnic minorities," according to the summary.
