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Greentech Media (Opinion): A No-Cost Way to Save US Clean Energy Jobs During the Crisis

Posted by Nat Kreamer on Apr 29, 2020

Greentech Media published an opinion piece by AEE's CEO Nat Kreamer on ways to provide relief to advanced energy companies during the COVID-19 crisis. Read excerpts below and the entire GTM piece here. 

The public health crisis of COVID-19 has brought much of the U.S. economy to a halt. While the most visible impacts have been in hotels and restaurants, the advanced energy industry has been hit hard as well. Specific relief that’s needed now can sustain the industry through the crisis and ensure that it is ready to drive economic recovery when the crisis has passed. Best of all, this relief will cost U.S. taxpayers nothing today — and if done right, it will boost U.S. manufacturing tomorrow. What is this simple, no-cost solution? 

Allowing direct payment instead of federal tax credits for advanced energy development. It could be done temporarily, for all projects, to keep the industry going through the crisis. If done on a permanent basis for projects using substantial domestic content it would provide a strong incentive for U.S. manufacturing of advanced energy products.

Under current law, installations of solar, wind, battery storage, fuel cells and other advanced energy technologies receive support in the form of federal tax credits, which are used to finance development. Even in good times, access to tax equity is constrained, as the market is controlled by just a few large banks, which take a 13 percent share of the proceeds. But now, with the economy virtually frozen, the tax equity market has all but dried up. Only the most well-capitalized developers can access tax equity financing today, and even that may not last for long.

There’s no reason that federal support for advanced energy development has to be funneled through the tax equity market. Allowing direct payment costs the federal government nothing more than existing tax credits already do. The outlay from the budget simply replaces forgone tax revenue. And it could be done easily, by making the value of tax credits refundable: For a company with tax liability, it would reduce taxes owed; if it has no tax liability or if taxes owed are less than the credit, payment would come in the form of a refund...

This change should be made on a temporary basis, to save jobs today and keep the industry working. But making direct pay permanent for projects using U.S. content would be a game-changer. It would give U.S. manufacturers a leg up in a growing market and provide a strong incentive for investment in U.S. manufacturing.

Preserving jobs today. Creating U.S. manufacturing jobs tomorrow. Saving money for consumers. Making America a global leader in clean energy. That’s what this smart, no-cost change in federal rules would accomplish. Congress should do it now.

Read the entire GTM piece here. 

Topics: AEE In The News