Blumenauer, Levin Introduce Legislation to Bolster Renewable Energy Projects with Direct Payment Option
Today, U.S. Reps. Earl Blumenauer (D-OR), a senior member of the House Ways and Means Committee, and Mike Levin (D-CA) introduced legislation to give taxpayers the option to take clean energy credits as a direct payment rather than a tax credit. The Renewable Energy Investment Act provides much-needed relief for renewable energy projects that have dealt with sluggish tax equity markets that are slowing project financing and deployment. The legislation also allows taxpayers with little or no tax liability to take advantage of these tax incentives, thereby expanding the pool of eligible investors and supporting the deployment of renewable energy across the country.
"This small but impactful change in renewable energy tax incentives will support wind, solar, and other energy projects at a critical moment for the industry and our country as we work to build our economy back better in a way that supports decarbonization,” said Blumenauer. “We were able to pass this important legislation last session in the House, and now, in partnership with the new administration and Democratic majority in the Senate, I am confident that we will be able to get this over the finish line.”
“As we continue to grow our economy and recover from this pandemic, it’s critical that we create the clean energy jobs of the future that also help us protect our planet,” said Levin. “Solar, wind, and other forms of renewable power are the future, and we can either create good-paying clean energy jobs right here in America, or we can let other countries take the lead and reap the economic rewards. My bill with Congressman Blumenauer to strengthen clean energy tax credits will allow California and the rest of the country to lead the world in the deployment of these technologies even as we deal with the economic consequences of the pandemic.”
The Production and Investment Tax Credits have long supported substantial expansions in the development of clean energy across the United States. Despite years of temporary federal tax policy, the cost of wind and solar energy generation has come down significantly, leaving it competitive with, and in some cases cheaper than, fossil fuel-generated energy.
However, the COVID-19 pandemic significantly constricted tax equity markets that are used to finance renewable energy construction. This constriction makes financing the project more difficult since tax equity investors may not have the tax liability to utilize all the available credits, therefore making investment less attractive. By adding a direct payment option, the Renewable Energy Investment Act would help correct this and ensure that renewable energy deployment isn’t delayed because of project financing challenges.
Addressing this issue has the support of President Biden, who included reference to a direct payment option for the Production and Investment Tax Credits in his American Jobs Plan overview.
The legislation introduced today in the House is supported by the Solar Energy Industries Association, American Clean Power Association, ACORE, the American Public Power Association, Sierra Club, League of Conservation Voters, Environmental Defense Fund, Natural Resources Defense Council, 8Minute Solar, Apex Clean Energy, EDF Renewables, and Invenergy.
“SEIA strongly supports direct pay and we thank Congressman Blumenauer for his leadership on this issue,” said Abigail Ross Hopper, President and CEO of the Solar Energy Industries Association. “The ability to finance solar projects is critical to meeting clean energy goals. If passed, direct pay will help unlock financing to create tens of thousands of well-paying jobs building clean energy infrastructure at the utility scale. This policy is an important step toward economic growth and job creation, and we look forward to working with Congress on this critical issue and others that are essential to our country’s clean energy future.”
“The American Clean Power Association strongly supports the Renewable Energy Investment Act introduced by Reps. Earl Blumenauer (D-OR) and Mike Levin (D-CA). With the right mix of policies in place, clean energy is poised for tremendous growth that will unleash economic expansion and job creation and significantly reduce our nation’s greenhouse gas emissions,” said Heather Zichal, CEO of the American Clean Power Association. “By providing a full direct payment for clean energy tax credits, this legislation will fix the current imbalance between tax equity supply and demand. We appreciate the leadership of Representatives Blumenauer and Levin and the support of all the bill sponsors in recognizing the importance of providing a full direct payment as a critical component of our nation’s infrastructure and energy needs.”
The Renewable Energy Investment Act previously passed the House as part of the Moving Forward Act (H.R. 2) in the 116th Congress. Other cosponsors of the legislation include Reps. Don Beyer (D-VA), Suzan DelBene (D-WA), Jimmy Gomez (D-CA), Steven Horsford (D-NV), John Larson (D-CT), Jimmy Panetta (D-CA), and Deborah Ross (D-NC).
For more about “What They’re Saying” in support of the Renewable Energy Investment Act, click here.
Full text of the legislation can be found here.