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Green Energy Coalition Dives Back in After White House Killed Key Tax Credits

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Weeks after the White House unexpectedly derailed a bipartisan tax deal for electric vehicles, offshore wind energy, and other major green priorities, dozens of emissaries from the nation’s renewable energy industries and environmental advocacy groups are gathering in the nation’s capital to begin charting their green-energy push for 2020 — and to dissect what went wrong in the final hours of its 2019 influence campaign.
The Wednesday meeting is the first since the White House in December abruptly blocked a painstakingly negotiated deal between congressional Democratic and Republican lawmakers, which would have secured long-sought, potentially lucrative new tax credits for electric vehicles, battery storage and offshore wind energy.
That overnight setback in December blindsided green energy trade associations and advocacy groups. A post-mortem — and tough questions over whether the growing confederation of some two-dozen green organizations needs to change its tactics — will be at the top of the agenda on Wednesday, insiders say.
“The focus is first going to be a look back – what we did, how we did it, how we did, and then a look forward. How we’re going to cross the finish line on these clean energy priorities,” said Bill Parsons, chief operating officer of the American Council on Renewable Energy, one of the organizers of the meeting. “Our feeling is that there was additional progress that could and should have been made last year. We’ve heard that sentiment expressed by a number of lawmakers on both sides of the aisle, and I think that there is a determination and a doubling down of the effort to make sure that that sentiment translates into concrete action this year.”
In the aftermath of last year’s negotiations, and with the 2020 presidential election in November, that may prove an even bigger challenge than last year.
“An election year is always tough for legislating, but it's totally not out of the question that it gets steam again. There were different pieces of leverage that ended up being left on the table to work with,” a renewable energy industry insider said. “Everybody is doing an assessment of what went down and what could've changed the outcome -- whether the outcome could've been changed -- and I've been pleasantly surprised by the community's motivation to start again and its resiliency on it.”
The meeting is being hosted by the Union of Concerned Scientists, a research group that advocates for climate action, with help from ACORE. It’s the latest in a series of informal meetings that began last April, bringing together trade associations and advocacy groups ranging from the American Wind Energy Association to the World Wildlife Fund. Although the coalition doesn’t have a name, its ranks have swelled in recent months.
“It grew to include not just the trades and the environmental groups, but also some individual companies and faith organizations and public health outfits and everybody who has a stake in transitioning to a renewable energy economy,” Parsons said. “The most impactful thing we can do is speak with one voice, and that’s what we’re trying to do.”
The discussion Wednesday is expected to focus on the group’s top priorities and its potential sources of leverage. The wind sector’s main trade group, for example, has said that its key goals include extending the sector’s production tax credit, or PTC, through 2024 and — pie-in-the-sky though it might be — a sweeping, so-called “technology neutral” tax credit, which would replace specific incentives for different types of power plants with a system that would reward electricity producers based on their carbon footprint.
“The one thing that is our top priority is to maintain technological parity with other renewables,” said Aaron Severn, senior director of federal affairs for the American Wind Energy Association. “If we really had our way, we’d be talking about a technology-neutral tax credit that was based on carbon emissions... recognizing that this year it’s going to be a pretty heavy lift.”
The so-called GREEN Act — for Growing Renewable Energy and Efficiency Now — introduced last November by Rep. Mike Thompson (D-Calif.), and which includes provisions such as new tax credits for electric vehicles, is also “going to be a rallying point,” Severn said.
The solar sector, meanwhile, is expected to set its sights on extending its investment tax credit, as well as landing a new standalone incentive supporting battery storage, which would allow solar farms as well as wind turbines to store excess power and later draw from it when the sun stops shining or the wind stops blowing — effectively transforming intermittent renewable energy resources into 24-hour sources of electricity.
“There's the extension of the tax credit, there's the development of climate policy, there may be other ways that might work,” a solar industry insider said.
The tactics are a key question: Democratic lawmakers involved in the late-night negotiations in December, faced with walking away entirely or cobbling together some kind of last-minute agreement, ended up surrendering two key sources of leverage, insiders say: First by allowing Republicans to include fixes to two so-called “technicals” — or errors arising from drafting mistakes in the 2017 tax deal — which has been a GOP priority, and second by giving Sen. Chuck Grassley (R-Iowa), effectively a three-year extension to biodiesel credits while other green energy sectors got just a one-year bump. That move essentially eased any pressure that might have been placed on the powerful Republican lawmaker to make concessions this year.
“Clearly with the biodiesel credit extended beyond 2020, that’s not really on the table, at least in the same kind of urgent way it was last year,” Severn said.
However, other technical glitches remain, chiefly related to the retail and restaurant sectors, and they’re still thought to be near the top of the list for Republican lawmakers.
“The issues that didn't get resolved with regard to retail and restaurant-expensing of different renovations, those didn't get fixed, and those groups are still looking for a fix,” a solar industry insider said. “There've been some rumors about what might be achievable. And there's been some gossip about why that won't work.”
The first opportunity to include any environmental incentive may come in May, when a series of health care tax credits are set to expire. Industry experts and insiders, though, say another end-of-year crunch of tax agreements may be more likely.
“That's when Congress has to get stuff done, but it's also when you have the most leverage -- big appropriations bills that have to get done,” another renewable energy industry insider said. “There were puzzle pieces that were left out of the end-of-year package that create room to work with.”
Updated to clarify AWEA's support of electric vehicle tax credits is part of its support of the GREEN Act.
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