Dive Brief:
- Committees in both the House and Senate are working on tax code proposals that could phase out renewable energy incentives for both the solar and wind industries, likely over a five-year period, according to The Hill.
- The wind production tax credit expired in 2013 and was extended one year, but has not been in effect this year. The solar investment tax credit is set to revert back to pre-2006 levels at the end of 2016, which would end the 30% tax credit for residential installations and reduce the credit to 10% for commercial installations.
- Renewable advocates say they can accept a future without the credits, but argue the nascent industries are still getting on their feet and need further assistance to remain competitive.
Dive Insight:
The constant debate over whether and for how long to extend renewable tax credits could be coming to an end. The Hill reports that lawmakers in both chambers are crafting measures that would phase the credits out over time, with a five-year period being the most likely route.
The wind production credit is not active now, and lawmakers over the summer were considering extensions. The solar credit, set to revert back to pre-2006 levels at the end of 2016, has also been the subject of much debate. Opponents say the tax credits obscure the real costs of green energy, and the federal government should not be picking which industries it wants to see supported.
Solar advocates say that even with costs declining rapidly, the industry still needs help.
“Our costs are down by 80%, we’re scaling up, we’re becoming more cost-competitive. But we do need a little bit longer,” Rhone Resch, president of the Solar Energy Industries Association, told The Hill. “We do, in the long run, have the intention to not be part of the tax code.”
Wind advocates also say that they want to see the credits extended but have not made any specific proposals.
There has also been discussion of lifting restrictions on the export of crude oil, with lifting that ban potentially used in exchange for stronger renewable credits. President Obama's $4 trillion budget proposal released earlier this year would have made the credits permanent, in addition to accelerating emissions targets for many states.
