House Ways & Means Committee advances clean energy-centric portion of the Build Back Better Act

Published on September 17, 2021 by Chris Galford

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With a vote this week, the House Ways & Means Committee advanced a package of tax credits designed to incentivize clean energy efforts, electric vehicles and manufacturing of clean energy technology and components, offering a critical forward step for the larger Build Back Better Act.

If the committee’s version of this legislation were to pass into law, current tax credits would be extended at full value to 10 years for clean energy generation, and solar generation would gain access to the production tax credit. Project developers with low tax equity could also gain tax credits for installing certain clean energy technologies, and solar developers would be incentivized to engage low-income communities with an additional 10 percent investment tax credit for the effort.

An additional incentive would also be provided for facilities that utilize at least domestic content requirements of 55 percent or more, while at the same time, credits would be cut dramatically for any project that fails to pay prevailing wages or utilize certain amounts of apprentice labor.

“We are encouraged by Chairman Neal and the Ways and Means Committee’s plan to drive investments in clean energy and transportation,” Elizabeth Gore, senior vice president of Political Affairs for the Environmental Defense Fund, said. “Extending and expanding a wide range of incentives for renewable energy technologies, energy storage, electric vehicles, charging infrastructure, energy efficiency, and other technologies that reduce carbon emissions will help us make significant progress on climate action, and drive economic and job growth in the process.”

As Gore alluded, vehicles and charging stations also would be encouraged through the bill. Light duty vehicles would have their manufacturing caps lifted, while consumers could earn electric vehicle tax credits of up to $12,500 for any vehicles assembled at U.S. facilities that use domestic-made batteries or work through a collective bargaining agreement. Medium and heavy duty trucks would benefit from a new tax credit of up to 30 percent of the cost of the vehicle. Even used electric vehicles would get a refundable credit of $1,250, with up to $2,500 possible for battery capacity.

As for charging infrastructure, the alternative fuel vehicle refueling property credit would be extended and expanded to reimburse up to $100,000 of the cost of charging port installation. Another 20 percent credit would be possible for qualified commercial ports.

“The provisions in this legislation will enable the continued rapid deployment of renewable energy projects along with energy storage and transmission upgrades to help our nation address the climate crisis and create good-paying clean energy jobs,” Heather Zichal, American Clean Power Association CEO, said. “We will continue working with Congress to ensure the current legislation accelerates, and does not hinder, clean energy deployment and ensure businesses can plan for the long-term helping our nation build for the future.”

All in all, the bill’s supporters see it as a solid means of moving toward greenhouse gas emissions reduction goals. The U.S. has pledged to cut such emissions by 50-52 percent by 2030. They also envision it as a means of actively countering climate change and its affiliated crises.

“The House Ways and Means and Energy and Commerce Committees have done important work in advancing legislation to tackle the climate crisis,” Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, said. “These energy proposals, including a long-term extension of the solar Investment Tax Credit with direct pay, a storage ITC, and focus on equity and access to clean solar energy, among other proposals, will reduce greenhouse gas emissions, create hundreds of thousands of American jobs in solar alone and jumpstart hundreds of billions of dollars in private investment. The path to enactment is still a long one.”