US power coalition demands action to deal with Coronavirus
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Renewable Energy Tax Incentive Extensions urged by US trade groups to offset COVID-19 supply chain delays, tax equity shortages, and financing risks, enabling direct pay, PTC and ITC qualification, and standalone energy storage credits.
The Important Points
Policy measures that extend and monetize clean energy credits to counter COVID-19 disruptions and financing shortfalls.
Extend start construction and safe harbor deadlines
Enable direct pay to offset reduced tax equity
Add a standalone energy storage credit
Renewable energy and other trade bodies in the US are calling on Capitol Hill to extend provision of tax incentives to help the sector “surmount the impacts” of the COVID-19 crisis facing clean energy.
In a signed joint letter, the American Council on Renewable Energy (ACORE), American Wind Energy Association (AWEA), Energy Storage Association (ESA), National Hydropower Association (NHA), Renewable Energy Buyers Alliance (REBA), and the Solar Energy Industries Association (SEIA) stated: “With over $50bn in annual investment over each of the past five years, the clean energy sector is one of the nation’s most important economic drivers. But that growth is placed at risk by a range of COVID-19 related impacts”.
These include “supply chain disruptions that have the potential to delay utility solar construction timetables and undermine the ability of wind, solar and hydropower developers to qualify for time-sensitive tax credits, and a sudden reduction in the availability of tax equity, which is crucial to monetising tax credits and financing clean energy projects of all types.”
The letter goes onto state: “Like all sectors of our economy the renewable and clean grid industry – including developers, manufacturers, construction workers, electric utilities, investors and major corporate consumers of renewable power – needs stability.
“The current uncertainty about the ability to qualify for and monetise tax incentives will have real and substantial negative impacts to the entire economy.
On behalf of the thousands of companies that participate in America’s renewable and clean energy economy, the coalition of organisations is requesting the US Government, echoing Senate calls to support clean energy, take three “critical” steps to address pandemic-related disruptions.
The first is an extension of start construction and safe harbour deadlines to ensure that renewable projects can qualify for renewable tax credits amid the Solar ITC extension debate and despite delays associated with supply chain disruptions.
The second is the implementation of provisions that will allow renewable tax credits to be available for direct pay to facilitate their monetisation, supporting U.S. solar and wind growth in the face of reduced availability of tax equity.
Thirdly, the signatories have requested the enactment of a direct pay tax credit for standalone energy storage to foster renewable growth as the industry sets sights on market majority and help secure a more resilient grid.
