The House Ways and Means Committee is currently debating legislation that could cut power sector emissions to between 64% and 73% below 2005 levels by 2031. Under the Build Back Better Act, tax incentives for such clean technologies as wind and solar, energy efficiency, and electric vehicles would be updated and extended through the end of the decade.
Jesse Jenkins, Assistant Professor of Mechanical and Aerospace Engineering at Princeton, explained the incentives in a series of tweets.
The draft bill grants most of the “direct pay” wishes of the solar industry too. In the proposed structure, nonprofits, tribal nations and other groups that don’t qualify for tax credits can instead receive direct pay refunds for solar projects.
Missing from the direct pay option, however, is Section 25D — the tax incentive targeted to the residential solar segment. The new coalition Residential Renewables for All believes direct pay for 25D is crucial for lower-income earners with limited or no tax liability who struggle to benefit from existing federal incentives.
Still, advocacy groups like Environment America are pleased with the current draft.
“We can now power our homes, our businesses and even our cars and trucks with clean, green and renewable energy. Tax incentives are one of the most critical tools to help us shift from dirty, polluting sources of power to clean ones at the necessary speed. These policies are also among the most popular. 69% of voters in competitive House districts support investments in clean energy such as wind and solar power by extending tax credits to spur innovation and manufacturing, which is exactly what this legislation does,” said Lisa Frank, Environment America Washington Legislative Office executive director, in a statement. “We applaud Chairman Richard Neal, Subcommittee Chairman Mike Thompson, and the many champions for clean energy in Congress for proposing the bold investments on clean energy that we need. We urge all members of the House Ways and Means Committee to support this important legislation.”
SEIA also supports the current version of the act.
“The House Ways and Means and Energy and Commerce Committees have done important work in advancing legislation to tackle the climate crisis. 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,” said Abigail Ross Hopper, SEIA president and CEO. “The path to enactment is still a long one. We look forward to working with members of the House, the Senate and the Biden administration on final legislation that decarbonizes the power sector and builds a clean energy economy that serves all Americans for decades to come.”
The House Ways and Means committee has begun markup of the bill, and Speaker Nancy Pelosi said she’s committed to passing it by Sept. 27.