This blog was authored by Elizatech Noll for Natural Resources Defense Council with assistance from her colleague Emily Barkdoll.
With Congressman Paul D. Ryan becoming Speaker of the House, his seat as Chairman of the House Ways and Means Committee is up for grabs. Both Representative Pat Tiberi and Representative Kevin Brady have thrown their hats into the ring to succeed him. The House Ways and Means Committee Chairmanship is one of the most powerful posts in Congress – the Committee oversees tax policy and entitlements like Social Security and Medicare, massive parts of the federal budget. Less known perhaps is that the Committee is also important to the future of clean energy in the United States.
One critical issue pending before the Committee is whether to renew clean energy tax credits, a decision that will have a significant impact on whether the U.S. is able to continue the rapid expansion of renewable energy that we’ve seen recently. In the past six years alone, we’ve installed enough wind to power the equivalent of over 11 million homes.
The pace of continued development and deployment of wind and solar power will be greatly affected by whether Congress extends the Production Tax Credit for Wind Power (PTC), the investment tax credit Investment Tax Credit for Solar Power (ITC) and the Investment Tax Credit for Offshore Wind Power. The PTC and the offshore wind credit have already expired; the ITC will disappear at the end of next year unless Congress takes action. These tax credits help level the playing field for clean energy to compete with fossil fuels which have enjoyed U.S. taxpayer subsidies for decades. The renewable tax credits need to be extended.
In addition, these clean energy tax credits have helped everyone breathe cleaner air and are critical to avoiding the worst effects of climate change. In fact, a recent study showed replacing conventional power generation with wind and solar in the Midwest and Mid-Atlantic would result in health and climate savings worth between $66 and $170 per megawatt hour, which means the benefits are up to 7 times greater than the credit.
The next Ways and Means Chairman, whoever it is, should continue these bipartisan tax extenders, not only because of their environmental and health benefits, but also because they will create thousands of jobs and support American businesses. In Rep. Brady’s home state of Texas, the wind energy industry supports over 17,000 jobs and provides over $26 billion in capital investment–even HP’s Texas data centers will soon be powered with wind energy. Texas also has 7,000 people employed by the solar industry. Ohio, Rep. Tiberi’s home state, reports 89,000 clean energy workers. Many of these jobs are in jeopardy with the ITC expiring and the PTC having already expired with no certainty of its future.
The on-again, off-again nature of the renewable tax credits – Congress keeps extending them for short periods, often letting them go dormant in between the extensions – means that the solar and wind industries are unable to predict costs. That makes expansion and growth difficult. A single-year extension just continues this uncertainty, although it’s better than letting the credits expire. What’s needed is for Congress to pass a long-term extension of both the ITC and PTC to create a stable environment for the industry and support the ramp up of clean energy fast enough to help achieve our nation’s climate objectives.
The ITC and PTC have significant bipartisan support among the public and among the nation’s governors. Earlier this month, more than 580 businesses and organizations sent a letter to Congress urging it to extend these credits as soon as possible. Of those businesses and organizations, 26 are located in Texas and 23 are in Ohio. Like their counterparts nationwide, those businesses need the certainty of stable tax credits to help them thrive; their employees need these credits extended to help them keep their jobs and stay healthy.
Whoever ends up chairing the committee will have an opportunity to take action on these important credits that bring huge benefits per dollar spent – let’s hope they embrace that opportunity to support America’s clean energy future.
Filed Under: Financing, News, Policy