The Clean Energy for America Act, put forth by Senator Ron Wyden on May 2nd, is an attempt to make the U.S. tax code to give fair treatment to renewable energy investments and production. Currently the tax code overwhelmingly favors fossil fuel and nuclear energy while at times penalizing renewables like solar. Of the twenty-five senators supporting the bill, 24 are Democrats and one Independent, with ZERO Republicans. This is unfortunately what we have come to expect in our current political environment.
The fossil fuel lobby currently has a stranglehold on U.S. energy policy from lining the pockets of unscrupulous politicians. Incentives and rebates for renewable energy such as solar, wind and other zero or low-emissions energy has been temporary. The federal investment tax credit (ITC) for solar and the production tax credit (PTC) for wind will effectively end in 2022 and 2024 respectively. Currently, the only incentive scheduled to remain in a paltry 10% tax credit for commercial solar.
The current U.S. tax code gives huge incentives to Big Oil while barely doing anything to move us towards 100% renewable energy. Many countries around the world have already committed to going 100% renewable by 2030.. Indeed, even progressive states and cities are doing far more than the federal government in this initiative. It’s past time to make a change, we don’t have decades, in another 10 years the damage will be irreversible.
Utility companies are encouraged to invest in renewable energy through tax incentives. These incentives directly benefit the company and lower rates for customers. Of renewable energy options, solar is one of the easiest and most cost effective to implement. This is what led the State of California to issue a solar energy mandate that goes into effect on January 1st of 2020.
The act would give property owners a tax credit of up to 30% for installing wind turbines or rooftop solar. This would be calculated similarly to the way it is for business owners. IRS Code Section 48C would be reauthorized and extended. This would provide another $5 billion in tax credits for renewable energy friendly projects such as manufacturing electric vehicles.
Connecting renewable energy tax policy to reducing emissions
Under the act, clean energy tax credits would last for 10 years from the year they begin. The emissions reduction tax credits would be phased out as emissions reduction goals are met. This would be after certification by the EPA and the DOE that the electric power sector is emitting 35% less carbon than in 2017. Facilities that qualify for the credits would be entitled to a 75% tax credit in year one which would reduce to 50%, 25% then to zero over five years.
As stated in the beginning of this article, the bill unlikely to pass due to the grip Big Oil has on many politicians. On top of that the current administration is anti-renewable energy. It also doesn’t believe in climate change. None of them are going to allow cuts to oil and gas incentives.
“It’s not all about cutting tax credits to Big Oil & Gas. Mostly it’s about expanding, strengthening and clarifying the tax code as it regards low-emissions energy technology. The act is technology-agnostic, as it’s meant to be—it includes a credit for carbon capture technologies, for instance, but it also cuts the credit for enhanced oil recovery (EOR), a corporate income tax extension, and another for transportation of gas and oil,” said Max Halik Senior Research Associate at Lux Research.
It’s time to move on from fossil fuels to renewable energy. It appears we will have to move on from certain politicians to get it done. If we do not then we only have ourselves to blame for the destruction of our civilization and leaving our progeny a poisoned planet.
ClearWorld is committed to helping cities across the U.S. meet their commitments to 100% renewable energy by providing Solar LED Lighting solutions and Smart Technology for the future.