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Microgrid Knowledge: What's the Ideal Way for the Microgrid Industry to Come Back from COVID-19

Posted by Lisa Cohn on Apr 17, 2020

Microgrid Knowledge reported on policy proposals for economic stimulation for microgrid growth after COVID-19, including AEE's perspective. Read excerpts below and the entire Microgrid Knowledge piece here.

Clean energy advocates are floating a range of ideas to stimulate post COVID-19 microgrid growth — from tax credits to relief funds to support for electrification of rural hospitals. The Solar Energy Industries Association (SEIA), Advanced Energy Economy (AEE), Institute for Local Self-Reliance (ILSR) and Alliance for Rural Electrification (ARE) are among the organizations calling for the measures. Their proposals come at a time when more than 100,000 US advanced energy workers are out of work,  a loss that wiped out last year’s growth in the industry, according to AEE

Further, nearly 400,000 industry workers suffer some form of job loss, when temporary unemployment and underemployment are considered. The majority of advanced energy businesses — about 60% — have not received any federal relief so far. SEIA noted that in 2019, solar was the top source of new electric generating capacity in the US, and represented 40% of new capacity installed. Before the COVID-19 crisis, the solar industry was moving toward adding 50,000 more workers and investing $25 billion in the economy this year. But now, the solar industry in the US could lose up to half of its workforce  — 250,000 jobs — in coming weeks...

A top priority is making the solar investment tax credit (ITC) funds more accessible, offering it as a cash payment instead of tax credit, a modification needed because many companies won’t have tax liabilities. “Direct pay won’t solve all the problems facing advanced energy companies as a result of COVID-19,” said a press release from AEE. “But it is a no-cost step Congress can take to stabilize advanced energy companies so they survive today and thrive tomorrow.”

The ITC is now the largest source of savings for average solar installations and it’s undergoing a scheduled reduction. The credit drops this year to 26%. down from last year’s 30%. Next year it falls further to 22% and then to 0% for residential and 10% for commercial solar in 2022. Delays in getting projects going could mean that companies won’t receive the 26% ITC this year, said Geoffery Underwood, founding partner at renewable energy developer Glidepath Ventures. For projects to be considered for the ITC’s annual deadlines, they have to either start physical work of a significant nature or meet the Five Percent Safe Harbor Test, which means that the business must pay or incur 5% or more of the cost of the solar installation in the year that construction begins...

Read the entire Microgrid Knowledge piece here.

Topics: AEE In The News