New Tax Bill..The Gravy Train is Over for Wind and Solar
GOP bill makes heavy cuts to green energy credits in its fine print
Congressional Republicans’ phase-out of the tax credits for climate friendly energy sources are expected to decimate the incentives and raise U.S. emissions.
While the GOP’s “big, beautiful bill,” which faces an uncertain future and a key committee vote Friday, proposes to phase out the credits over several years, analysts say the legislation’s fine print effectively cuts them entirely.
“What’s in the text now is about as bad as it could be and is likely to cause a lot of project cancellations, and that has knock-on effects on the economy, on people’s energy bills and so on,” said Robbie Orvis, senior director of modeling and analysis at climate policy think tank Energy Innovation.
“It’s pretty rough in terms of the outlook for clean energy,” Orvis added.
One of the most significant provisions in Democrats’ 2022 Inflation Reduction Act was “technology neutral” tax credits that provide significant subsidies to any energy source that can get its planet-warming emissions below a certain threshold.
The Republican bill winds down those credits, along with a separate one that specifically benefits nuclear energy, over the next six years or so.
But it also adds new restrictions on who can claim those credits.
The most significant of those is language that says that projects that start construction more than one year after the bill’s passage cannot qualify for the credit if they have any components, subcomponents or minerals that are built, mined or processed in China.
China is a major hub for minerals processing, and it may be difficult for companies to find ones that are not refined there, especially on such a tight timeline.
Derrick Flakoll, senior policy associate at BNEF, said that in effect, these requirements are similar to “a full cutoff for projects from mid-2026” because of “the ubiquity of Chinese critical minerals, Chinese intellectual property, Chinese batteries, polysilicon for solar [and] permanent magnets for offshore wind.”
Constantino Nicolaou, CEO of manufacturing and installation company PanelClaw, told reporters during a solar industry press briefing that these requirements are “unworkable.”
“It is so complicated for a manufacturer, it is so complicated for a developer, it’s so complicated for a financier,” Nicolaou said, particularly pointing to the subcomponent and mineral restrictions.
The solar industry is lobbying heavily for changes to be made to this provision and others. Representatives from the Solar Energy Industries Association and its member companies have met with 40 congressional offices this week.
Meanwhile, the GOP bill also kills something called “transferability” that makes it easier for projects to get financing.
Supporters of the credits also say the timeline is particularly short because in the legislation the credit can only be claimed based on when projects actually start producing energy rather than when their construction begins.
Initial analyses of the credits are coming to similar conclusions. Modeler Rhodium Group found the changes to the tax code under the GOP plan are “likely to be similar to the impact of a full repeal of the energy tax credits.”
“There’s been a couple years of investments already made, stuff that’s already come onto the grid, electric vehicles that have already been bought. This doesn’t step away from those, but it does mean that going forward, you wouldn’t see the benefits of those tax credits,” said Ben King, associate director of Rhodium Group’s Energy & Climate practice.
The group’s analysis found that such changes could raise household energy bills by up to 7 percent in 2035 and could also drastically raise U.S. planet-warming emissions. The group’s baseline scenario puts U.S. emissions between 31 percent and 50 percent lower in 2035 than where they were in 2005, while the policies proposed in the bill would bring emissions down by only between 23 percent and 39 percent.
King said that in practice, the change in emissions that year is about equivalent to the current emissions of Florida, Ohio and Pennsylvania combined.
Overall, Chris Seiple, vice chair of Wood Mackenzie’s Power & Renewables group, described the bill as “a sledgehammer disguised as a scalpel,” in an email to The Hill.
Meanwhile, lawmakers in both the sledgehammer and the scalpel camps are criticizing the package as not going far enough and going too far, respectively.
Thirteen Republicans asked House Leadership for more flexibility in a statement on Wednesday, while the House Freedom Caucus member Rep. Chip Roy (R-Texas) lamented on social media that the bill “delays IRA subsidy repeal until after Trump.”
Roy has said he will vote against the budget package in its current form, and GOP senators are already signaling that it faces stiff headwinds should it survive the House and make it to the upper chamber.
—Updated at 12:53 p.m. EDT
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CMP Transmission Rate Skyrockets 19.6% Due to Wind Power
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Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT
******** IF LINKS BELOW DON'T WORK, GOOGLE THEM*********
(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 https://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" https://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” https://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/
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Hannah Pingree on the Maine expedited wind law
Hannah Pingree - Director of Maine's Office of Innovation and the Future
"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."
https://pinetreewatch.org/wind-power-bandwagon-hits-bumps-in-the-road-3/
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