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As Congress drafts budget bill, dozens of climate advocates seek clean energy incentives

Highlights

Seek expanded, extended clean energy credits

Call for a direct-pay or refundable credit option

Dozens of clean energy trade groups and conservation organizations appealed to the US House Ways and Means Committee to include several incentives for renewable energy and storage technologies in the forthcoming budget bill.

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As Congress works to draft bills to carry out the $3.5 trillion budget resolution that passed both legislative chambers, clean energy and climate advocates are seeking a "stable, predictable and long-term clean energy and transportation tax platform," according to a Sept. 7 letter signed by 52 organizations, including: the American Council on Renewable Energy, Advanced Energy Economy and Solar Energy Industries Association.

The groups said the budget reconciliation process as a major opportunity for the US to act on climate change and called on the committee to prioritize tax incentives to help advance clean energy technologies. Bills advancing through the budget reconciliation process are not subject to the Senate's filibuster, requiring only a simple majority for passage. Democrats have a slim majority in both legislative chambers.

Specifically, the organizations want lawmakers to include long-term incentives for renewable energy technologies and extend the new offshore wind investment tax credit, which was included in the bipartisan stimulus package and government funding bill that Congress passed in December of 2020. The groups asked the committee to also offer production tax credit optionality in addition to the offshore wind credit extension.

Among other priorities, the groups are seeking an expanded tax credit for domestic clean energy manufacturing and an investment tax credit for energy storage and high-voltage transmission projects. Additionally, they asked the committee to modernize tax incentives for energy efficiency improvements in the commercial and residential sectors.

The dozens of entities called for a direct pay option for all these clean energy tax incentives or said such credits should be made refundable.

Citing reports of hundreds of billions, if not trillions, of dollars in expected damages due to a warming world by the end of the century, the groups said Congress should use the budget reconciliation process to "act both decisively and boldly on climate change."

"Action to address the climate crisis must be taken across the board, and key among many policies is a foundation of strong federal incentives for clean energy," the groups said. "This year's legislative opportunity is the best, and possibly the last, chance we have to put the country on a path to a clean economy in a timeframe that avoids the most catastrophic climate impacts."

The groups also acknowledged the economic benefits of the clean energy industry, a sector where job opportunities were growing considerably before the COVID-19 pandemic hit. Such tax incentives, among other measures, could help create jobs and aid in economic growth, the groups said.

"The clean energy sector is also an increasingly important source of American innovation, energy independence, and international competitiveness in the 21st century global economy," they said.