Dive Brief:
- A Republican lawmaker in the U.S. House of Representatives has proposed new tax credits aimed at boosting energy innovation and efficiency.
- Rep. Tom Reed, R-NY, on Thursday, introduced the Energy Sector Innovation Credit Act, which he says will encourage the U.S. energy market to be "technology-diverse" and stop "picking winners and losers." The bill includes an Emerging Energy Technology Electricity Production Credit and an Emerging Energy Technology Investment Credit.
- The new credits would not be available to technologies claiming existing incentives like the Investment Tax Credit or Production Tax Credit, like wind and solar generation. Reed says the policy would encourage innovation in energy storage and does not specify what other resources the policy would apply to.
Dive Insight:
"The United States is falling behind in energy innovation because the size and the complexity of the energy market stymies American ingenuity and entrepreneurship," Reed said in a statement. The new proposal "keeps government from picking winners and losers so all innovative, efficient energy technologies can succeed."
The legislation specifies the new investment credit would be 30% of "the basis of any qualified emerging energy property placed in service by the taxpayer during such taxable year." The credit could be worth 40% on "first of-a-kind" technology.
Qualifying projects could include retrofits that improve efficiency, cut water consumption and decrease pollutants at an existing generation facility.
The proposed emerging energy technology production credit would also scale down as generation grew: The production credit could be worth 60% for a technology representing less than 0.5% of national generation, but that would ramp down to 15% as the percent of generation rose to 2%, according to a summary of the bill.
The existing Production Tax Credit and Investment Tax Credit available to wind and solar, respectively, have been successful in helping grow renewables but are also being phased out over the next several years.
