Renewable energy policy in the U.S. has faced threats recently from both sides of the political aisle. This month U.S. Senators Sherrod Brown (D-OH) and Todd Young (R-IN) introduced legislation that would make it easier to bring trade cases like Auxin Solar, which crippled the solar industry for a year. Even though Democrats have climate leaders, like Alexandria Ocasio-Cortez (D-NY) and Ed Markey (D-MA), a growing number of Democrat’s favor protectionist trade policy over renewable energy deployment.
Numerous Democrats in the House and Senate joined Republicans in attempting to override President Biden’s two-year suspension of tariffs on solar imports from Southeast Asia. Biden ultimately vetoed the Congressional Review Act (CRA), but with additional votes Congress could potentially overcome the veto. Rep. Dan Kildee (D-Mich.) was among those immediately calling for another vote to override the veto, stating that the tariffs stand up to unfair trade practices hurting American workers. Proponents of Biden’s pause counter that the tariff kills jobs in the solar industry, while also delaying important progress on climate goals. During floor debate, Sen. Jacky Rosen (D-Nev.) argued that the tariff suspension was a necessary “bridge” to keep the U.S. solar industry supplied until manufacturing is reestablished in the U.S. “We can’t cut off supply of imported solar panels by enacting massive, retroactive tariffs that will just kill solar projects; it will kill American jobs, and it will hurt American workers,” Rosen said.
The clean energy tax incentives in the Inflation Reduction Act (IRA) are also under threat. The legislations set aside a record $369 billion for energy and climate change. The law is expected to accelerate the deployment of low-carbon technologies and spur domestic manufacturing while putting the U.S. on track to decrease greenhouse gas emissions by about 40% below 2005 levels in 2030. However, its partisan origins have made it a Republican target. During the debt limit standoff, House Republicans passed a bill that would have rescinded most of the IRA’s tax incentives, essentially gutting its effectiveness. That bill never reached a vote in the Senate, but a new bill in the House, the Build It in America Act, includes similar provisions to repeal the investment and production tax credits.
Federal policies aren’t the only ones at risk, either. The California Public Utilities Commission (CPUC) unanimously approved new Net Energy Metering (NEM) rules at the end of 2022 that will reduce the amount that utilities pay to owners of rooftop solar systems that feed excess power back to the grid. The California Solar & Storage Association said the changes were “a step backwards” and will slow the pace of solar installations in the state. The industry group estimated the average compensation rate under NEM 3.0 would drop by 75%, from 30 cents per kilowatt to 8 cents.
On the flip side, utilities said the NEM changes didn’t go far enough and that customers without solar will unfairly bear the cost burden of maintaining the power grid of the future. Meanwhile, the CPUC said the policy shift is meant to incentivize solar owners to add batteries to their systems allowing them to feed power back to the grid during evening and night-time hours and helping to balance supply and demand statewide. As the leader in residential solar, California policy is influential nationwide, and momentum is gathering to reduce net-metering rates in other parts of the country as well. The issue has come in front of regulators in North Carolina and Florida since the California change took effect.
In Texas —the state with the second-most solar capacity — the state Senate passed SB 624 which, in its original form, significantly restricted permitting of new solar and wind projects. Despite adding an astounding 9.16 gigawatts (GW) of new capacity in 2022, the renewables industry in Texas was on the verge of being “hogtied,” according to Luke Metzger, executive director of advocacy group Environment Texas. But negotiations in the reconciliation process lessoned the impact of the bill that was ultimately sent to Governor Greg Abbot.
If signed by Abbot (as expected) the PUC Sunset bill (HB 1500) will still require renewable energy projects to pay higher transmission fees, according to a report in PV Magazine. Plus, beginning in 2027, all renewable energy projects in Texas will be required to meet firming requirements. These make renewable developers responsible for subsidizing non-variable power production, such as energy storage or generation from fossil fuels. The Public Utility Commission of Texas also intends to study whether to make renewables pay higher “ancillary services” costs.
In short, clean energy advocates must continue to fight. The industry is on the cusp of rapid growth in the U.S. Naturally, this creates the need for regulatory and policy adjustments, but it is also bringing up resistance from entrenched interests. Vigilance is needed to protect hard-won progress and to continue the growth of renewables.
