New Senate legislation would create temporary direct pay option for solar ITC

U.S. Senator Tom Carper (D-Del.), Chairman of the Environment and Public Works Committee (EPW) and senior member of the Senate Finance Committee, along with U.S. Senators Sheldon Whitehouse (D-R.I.) and Martin Heinrich (D-N.M.), introduced legislation on March 25 that would help the clean energy industry create good-paying jobs and recover from the COVID-driven economic downturn.

The Save America’s Clean Energy Jobs Act would allow for temporary refundability of section 45, 45Q, and 48 investment and production tax credits, which incentivize private development of renewable energy projects such as solar, wind, fuel cells and carbon capture and sequestration. This will enable clean energy companies to bypass frozen tax equity markets and access these tax credits directly, which in turn will help get stalled projects off the ground and people back to work.

Securing a direct pay option was one of SEIA’s top goals to help the industry recover from the pandemic.

“We should not let this pandemic permanently hold back American leadership in combating the climate crisis,” said Chairman Carper. “Clean energy investment and production tax credits have been indispensable tools in driving clean energy and economic growth in this country. Going into 2020, an estimated 3.4 million Americans went to work in clean energy occupations and renewable generation is surpassing coal generation in this country. Yet, the COVID-19 economic crisis created an immediate crisis in clean energy financing, stalling current and future clean energy projects and leaving over 400,000 Americans who once had a job in the clean energy sector unemployed today. By allowing for temporary refundability of these clean energy tax credits, the Save America’s Clean Energy Jobs Act will help revive the clean energy industry, create jobs throughout the country, and drive the kind of innovation we need to boldly cut emissions from our power sector.”

“The last administration handed the fossil fuel industry an enormous public bailout early in the pandemic,” said Senator Whitehouse. “With no time left to waste on climate change, we also need to help the generators of clean energy quickly overcome pandemic-related setbacks. Our bill will give renewables a lift as they ramp back up and create green jobs.”

“The clean energy transition represents our greatest opportunity to create millions of new careers all across America, making it critical that we protect this industry from the negative economic effects of the COVID-19 pandemic,” said Senator Heinrich. “I’m proud to help introduce this legislation to provide temporary investment and tax credit solutions to create long-lasting sustainability for the clean energy industry and the millions of clean energy careers on the horizon.”

The American Clean Power Association (ACP) issued the following statement from CEO Heather Zichal in support of the legislation:

“ACP is grateful for Chairman Carper’s leadership on this legislation, just the latest initiative he has championed benefiting clean energy in a legacy of leadership dating all the way back to his time as Delaware’s Governor. As we rebuild from COVID-19, this direct pay bill is an essential down payment to fix the constrained tax equity markets and ensure companies both large and small can continue to embrace clean energy solutions and create jobs. The last year has been challenging for everyone. Smaller developers, in particular, have struggled to secure tax equity partnerships, putting otherwise viable projects in jeopardy due to capital constraints. The availability of a 100% direct pay option is crucial for clean energy deployment. Tax equity scarcity is a long-term challenge. We encourage all lawmakers to think holistically about additional solutions.”

From February to December 2020, the clean energy sector lost nearly 430,000 workers, a 12% decline over pre-pandemic employment levels.

The full text of the bill can be found here.

The bill has broad support among clean energy stakeholders, including Solar Energy Industries Association, American Clean Power Association, Bloom Energy, Xcel Energy, Fuel Cell and Hydrogen Energy Association, ACORE, Apex Clean Energy, National Wildlife Federation, Advanced Energy Economy, Clean Air Task Force, Third Way, Consumer Energy Alliance, Sunnova, Pattern Energy, Intersect Power, Clearway Energy Group and SunPower.

News item from the Office of Sen. Tom Carper

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Original Source: https://www.solarpowerworldonline.com/2021/03/new-senate-legislation-temporary-direct-pay-option/