Urgency mounts for Congress to negotiate a clean energy package through reconciliation
With a new report showing the deployment rate of clean energy projects substantially slowing in the second quarter, requests this week by hundreds of clean energy groups, as well as members of both the International Brotherhood of Electrical Workers (IBEW) and the Solar Energy Industries Association (SEIA), urged Congress to get back to the negotiating table and pass climate legislation.
“We believe that there is broad support for the legislation, which will be a boon to the U.S. economy and deliver critical climate relief,” wrote IBEW and SEIA members in a July 25 letter sent to all congressional members. “The legislation now being debated in Congress will also reduce the deficit and ease inflation.”
Likewise, a July 26 letter from more than 250 clean energy groups sent to U.S. House Speaker Nancy Pelosi (D-CA) and U.S. Senate Majority Leader Chuck Schumer (D-NY) called for policymakers to, if necessary, delay their August congressional recess to “re-engage in negotiations and pass the energy tax package through reconciliation.”
“The energy tax package that is under consideration is transformational in terms of its impact,” said Lisa Jacobson, president of the Business Council for Sustainable Energy (BCSE), which joined over 230 companies and 50 stakeholder groups that support clean energy, energy efficiency and clean transportation in urging congressional leadership and the Biden administration to keep working and pass the energy tax package through reconciliation.
“It will help to lower energy costs for consumers and enhance our nation’s economic competitiveness and security,” Jacobson said. “BCSE, joined by energy industry leaders and stakeholders, urges Congress to pursue every pathway to include this tax package in the reconciliation bill.”
The urgency follows the inability of Congress to pass President Joe Biden’s climate legislation, which includes hundreds of billions of dollars in tax credits for clean power. U.S. Sen. Joe Manchin, a conservative Democrat from coal-producing West Virginia, shut down the legislation based on what he said were concerns over inflation.
Earlier this week, however, American Clean Power (ACP) released its Clean Power Quarterly Market Report for this year’s second quarter, showing that stalled policy, economic factors facing the industry and trade issues have impacted clean energy project development and increased the backlog of new project delays.
During the second quarter, the industry saw a 55 percent decline in project installations from the same period in 2021, with 3,188 megawatts (MW) of utility-scale clean power capacity installed, according to an ACP statement on the report, which says this makes the second quarter the lowest quarter for clean energy capacity additions since the third quarter of 2019.
“We have been warning about the storm of policy and economic headwinds the clean power industry is facing, and this is a step in the wrong direction,” ACP Chief Executive Officer Heather Zichal said Tuesday.
Congressional inaction and uncertainty on long-term tax policy, tariff and trade restrictions, and transmission constraints all impact the demand for clean energy at a time when the industry needs to be rapidly scaling up development, Zichal added.
“Our member companies are ready to make the investment decisions necessary for building America’s clean energy economy, but the current business and policy environment is slowing the rate of deployment,” she said.
According to the ACP quarterly report, more than 32.4 gigawatts (GW) of clean power projects have been delayed and have not yet achieved commercial operation since the end of 2021; that’s enough energy to power 6.5 million homes and support 110,000 jobs, and it represents $45 million in investment.
Solar projects are the most prone to delays, reported ACP, with nearly 21 GW of solar projects currently delayed, many due to misguided trade actions. Solar accounts for 64 percent of all projects delayed. Wind makes up 17 percent of total delays in the first quarter of 2022, and battery storage makes up 21 percent of delays, the report says. Energy storage was the only technology to experience growth, with a 13 percent increase in installations, ACP reported.
And contrary to Manchin’s concerns, BCSE and others wrote in their letter that the energy tax package negotiated as part of the reconciliation process would fight inflation by reducing the cost of energy for American families and businesses, decrease the deficit and build a pipeline of good-paying jobs across the country and across numerous skill levels and sectors.
“The energy package will also make significant emission reductions over the next decade and advance U.S. competitiveness and domestic manufacturing and increase our energy security,” the groups wrote to Pelosi and Schumer. “The opportunities are too great to abandon, and the cost of inaction is too high not to make every effort for success. A window of opportunity remains, and we urge you to take it.”
Likewise, the IBEW and SEIA called on Congress to make a robust, equitable clean energy economy a reality. They also noted that they support several proposals under consideration, including clean energy and EV charging tax incentives; domestic content requirements on clean energy and EV charging tax incentives; the Solar Energy Manufacturing for America Act; a new tax credit for standalone energy storage; support for interstate transmission lines and zero-emission buildings; and greater investment for clean energy in low-income communities.
“This legislation pairs labor standards with an aggressive path forward on solar development,” IBEW and SEIA wrote. “With it, we can create the jobs needed to build a strong economy, prosperity for all Americans and a major tool to fight inflation. Without it, we face a troubling climate future and a lost opportunity to regain global climate leadership.
“Members of Congress, we implore you to get an American energy deal done,” they wrote.
