Trying to avert a federal government shutdown, the U.S. Congress is scrambling to complete a $1.15 trillion spending bill that is loaded down with riders and unrelated amendments. The bill includes Solar ITC and wind tax credits.
Some of the riders include the Republican proposal for Crude Oil exports and the Democratic proposal of a 10-year extension or permanent status for wind (PTC) and solar power tax credits (ITC). (Read about additional riders)
In the evening of December 10th, Congress sent President Barack Obama a short-term spending bill to keep the government open through next Wednesday. House Speaker Paul Ryan said “I’m not going to put a deadline on it…I want to make sure that negotiations are done well and done right, and not by some arbitrary deadline.”
Crude Oil Exports – Ending the Ban (R)
“The oil export ban was put in place after gasoline prices spiked following the Arab oil embargo in the early 1970s. Over a dozen oil producers such as ConocoPhillips, Hess Corp. and Pioneer Natural Resources Co., who could make as much as $30 billion in additional annual revenue from the change starting in 2025, have been lobbying to have the ban ended, arguing it makes no sense in the face of booming domestic production.
Oil Change International…said lifting the oil export ban would lead to an increase of 500,000 barrels per day by 2020, and estimates the change would lead to an emissions increase of as much as 110 million metric tons of carbon dioxide equivalent a year. That figure represents the emissions from 29 average U.S. coal-fired power plants or more than 23 million average passenger vehicles” (Source)
Environment – Extending Tax Credits (D)
“While most Democrats have been opposed to stand-alone legislation to lift the ban (on Crude Oil Exports), some see the change as a chance to bargain for priorities…such as a long-term extension of the wind production tax credit that expired at the end of 2014 (PTC) and an extension of an investment tax credit (ITC) for the solar industry. Making those tax credits permanent would cost $32 billion over 10 years, according to consulting firm ClearView Energy Partners.
Other Democratic requests in exchange for lifting the ban included the reauthorization of the Land and Water Conservation law, which uses oil and gas royalties for recreation and conservation projects. Passage of long-stalled energy efficiency legislation (S. 720); money to fulfill President Barack Obama’s pledge for $100 billion for the Green Climate Fund to help developing countries; and elimination of some policy riders that Republicans wanted, including measures targeting the Environmental Protection Agency’s Clean Power Plan and Clean Water Rule.” (Source)
The pace of continued development and deployment of wind and solar power will be greatly be affected by whether Congress extends the Production Tax Credit for Wind Power (PTC), and the Investment Tax Credit for Solar Power (ITC). The PTC has already expired and the ITC will expire Dec. 31, 2016 unless Congress takes action. If the ITC is not passed residential systems must be installed and operating by the end of 2016 to qualify for a 30% tax credit. The tax credit for commercial systems will remain, though it will drop to 10% from 30% by 2017.
Many believe that the tax credits help level the playing field for clean energy to compete with fossil fuels which have enjoyed U.S. taxpayer subsidies for decades. If you are interested in supporting the extension of the Investment Tax Credit send an email to your Senators and Representatives. Provided by: The Solar Energy Industries Association.