The Ways and Means Committee of the U.S. House of Representatives on Nov. 19 released a draft tax package for clean energy projects that includes a five-year extension of the 30% solar Investment Tax Credit (ITC), along with new incentives for energy storage.

The legislation also supports incentives for electric vehicles (EVs), offshore and onshore wind farms, and energy efficiency measures, among other items.

“This bill will build on existing tax incentives that promote renewable energy and increase efficiency and create new models for technology and activity to reduce our carbon footprint,” Mike Thompson (D-Calif.), chairman of the Subcommittee on Select Revenue Measures, said in a statement Tuesday.

Critics of the package include six groups—Americans for Tax Reform, Americans for Prosperity, the Center for a Free Economy, FreedomWorks, Heritage Action, and the National Taxpayers Union. Those groups earlier Tuesday shared a letter and asked lawmakers not to extend tax credits or give more support for renewable energy, saying phaseouts of credits adopted in 2015 should be continued.

“Clearly these industries can and should stand on their own two feet. Cronyism tax benefits such as these are bad tax policy,” the groups wrote.

Ken Kimmell, president of the Union of Concerned Scientists, had a different view. “House Ways and Means Chairman Richard Neal recognizes that the tax code works best when it reflects our needs and our values,” Kimmell said. “Tax credits that support clean energy will reduce carbon emissions and create jobs, strengthen local economies, and improve public health at the same time.

“Congress needs to pass as many of these tax incentives as possible before the end of the year to keep clean energy momentum going at a time when the federal government is going backward on addressing the greatest challenge we face: runaway climate change.”

Extensions Through 2024

The measure would extend through 2024 a credit for electricity produced from renewable energy sources, including qualified hydropower. It extends a 30% investment tax credit for solar energy projects, a level that would drop in later years. The measure also extends for one year a credit for carbon oxide sequestration facilities that begin construction before the end of 2024.

It also makes standalone energy storage projects eligible for tax credits; previously, such projects needed to be paired with another renewable energy source.

Other proposals in the draft legislation include preserving the tax credit for wind energy projects at 60% through 2024. A credit for biodiesel production at $1 per gallon would be extended through 2021; the credit would phase out in 2024.

Representatives from the renewable energy sector quickly voiced their support for the measure.

Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), in a statement Tuesday said: “This is a positive development for everyday Americans who want access to affordable clean energy. The Solar Investment Tax Credit enjoys bipartisan support in the House and is responsible for making solar energy an American economic success story. An ITC extension will create thousands of jobs, add billions of dollars in private investment to the economy and reduce emissions. These benefits will be further accentuated with the inclusion of storage in a clean energy tax package.

Abigail Ross Hopper, CEO of the Solar Energy Industries Association.

“While the discussion draft is an important step forward, now is not the time to stop pushing. We still need to make sure solar remains part of any end-of-year deal and our fight isn’t over until an ITC extension is enacted into law. This package clearly conveys the sentiment that the ITC should be extended and we commend the House Ways and Means Committee for making solar expansion a priority. We urge Congress to consider this package and pass an extension of the solar ITC.”

John Bowman, managing director for government affairs at the Natural Resources Defense Council (NRDC), an environmental organization, in a statement said: “With more and more members of Congress stepping forward to recognize the urgency of our climate crisis, this package of measures deserves broad support. We encourage House leadership to quickly bring a package of clean energy extenders to the floor for a vote. This is the one chance we have this year to move true climate legislation.

“Lawmakers have pushed for the extension and expansion of these credits in recent months, and we look forward to working with members of both parties to get this measure turned into law.”

New Jersey Hikes Commitment to Offshore Wind

The release of the draft legislation, known as the “Growing Renewable Energy and Efficiency Now Act of 2019,” or the “GREEN Act of 2019,” came as New Jersey on Tuesday announced it plans to more than double by 2035 its commitment to offshore wind power generation capacity. The state’s new target is 7,500 MW, up from 3,500 MW by 2030.

Gov. Phil Murphy, in a ceremony today in Jersey City where he stood with former Vice President Al Gore, signed an executive order to set the new goal. “Think about it for a second— when we meet this goal, our offshore winds will generate enough electricity to power more than 3.2 million New Jersey homes,” Murphy said. “We will meet half of our electric power need. We will generate billions of dollars in investments in our state’s future that will, in turn, generate thousands of union jobs.”

Gore called such renewable energy projects an “emotional reward” for battling climate change, and said it would be a “wonderful opportunity for good jobs.” New Jersey’s Board of Public Utilities in June approved a $1.6 billion wind-energy farm about 15 miles off the coast of Atlantic City. The project by Ocean Wind, a joint venture between Danish energy company Ørsted and PSEG, would be the largest of its kind in the U.S.

New Jersey is among states that have set goals for renewable energy production. Murphy wants the state to have 100% renewable energy by 2050, in a plan that includes solar and wind and also considers nuclear power as an option. Neighboring New York also this year established a 100% clean energy goal.

Liz Burdock, CEO and president of the Business Network for Offshore Wind, in an email to POWER said, “The International Energy Agency reports almost $1T [$1 trillion] will be in invested in offshore wind by 2040. Today’s announcement by Governor Phil Murphy and the New Jersey Board of Public Utilities places New Jersey, its businesses and residents in a strong and unique position to capitalize on the ongoing growth in the global offshore wind market. “This additional 3,500MW will accelerate the development of the state’s offshore wind industry and supply chain, and will translate into more economic opportunities, and more jobs, up and down the New Jersey coastline.”

Tom Kiernan, CEO of the American Wind Energy Association.

Tom Kiernan, CEO of the American Wind Energy Association (AWEA), in a statement e-mailed to POWER, praised Neal (D-Mass.), chairman of the House Ways and Means Committee, for his role in drafting the legislation and its extension of the wind energy tax credit.

“We commend Chairman Neal for his leadership in recognizing the value of the PTC and ITC in promoting economic growth and reducing carbon emissions,” Kiernan said. “Federal tax incentives for renewable technologies like wind and solar have been an indisputable federal policy success and this legislation will extend tax credits for onshore and offshore wind energy, putting the industry a step closer to tax policy parity with other energy sources. The market has changed significantly since 2015—national carbon policy hasn’t materialized, and we have new tariffs significantly raising the cost of wind energy and U.S. manufacturing. While we support the bill, offshore wind is an emerging industry at a critical juncture, and we would like to see longer-term support for its development … the GREEN Act provide a step towards tax policy parity to cost-effectively meet strong consumer demand for clean energy.  We look forward to working with Chairman Neal and the House in passing this important legislation.”

Changes to EV Credit

The tax package proposal includes a revised credit for EVs. At present, a federally backed $7,500-per-vehicle credit for EVs begins to phase down once a manufacturer sells 200,000 vehicles. Tesla and General Motors Co. have already surpassed the 200,000-vehicle threshold. The new bill would make a $7,000-per-vehicle credit available for vehicles sold, up to a new limit of 600,000.

Bill Cassidy (R-La.), a member of the Senate Finance Committee, in a discussion at the Bloomberg Tax Leadership Forum on Tuesday expressed concern about the EV tax credit. Said Cassidy: “You have to realize that electric car vehicles are being bought by the well-off and being subsidized by those who are less well off.”

Interestingly, California next month will enact new income limits for eligibility for the state’s rebate program for EV purchases. Since 2010, the state has handed out $809 million to help put 354,000 battery-electric, plug-in hybrid, and hydrogen fuel-cell vehicles on public roads, according to Car and Driver, which said 30% of that total payout “went to people capable of paying six-figure prices to acquire a Tesla.”

California in 2016 began restricting the rebate to single tax filers making $250,000 or less annually. After Dec. 3, the income cap is lowered to $150,000, or $300,000 for joint tax filers. Plug-in hybrids with Environmental Protection Agency-rated electric ranges of less than 35 miles, which represent most plug-in hybrids, are no longer eligible for the rebate regardless of the buyer’s income. In addition, any EV or hybrid vehicle with a list base price of $60,000 or higher will no longer be eligible.

Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).