Actions taken in the waning days of the Trump Administration brought a sigh of relief from proponents of wind and solar projects, and the new Biden Administration likely will help clean-energy advocates breathe even easier.
As reporter Dallas Heltzell notes in an article of this edition of BizWest, Congress in December passed an omnibus spending bill that included a two-year extension of the federal tax credit for solar projects, and a one-year extension of the federal tax credit for wind projects.
Wind projects are eligible for a tax credit of 60% of the allowable amount for any project, provided that construction begins by year’s end.
For solar projects, the tax credit applies at 26% of eligible costs for commercial projects that begin construction by the end of 2022, dropping to 22% in 2023 and then 10% indefinitely, Heltzell reported. Residential credits will apply at 26% through 2022, dropping to 22% in 2023 and 0% in 2024.
The extensions provided a measure of stability for clean-energy companies. As Jason Sharpe, CEO of Boulder-based Namaste Solar, told BizWest, “Now, we’ve got two more years of a stable market, and we’re excited to grow and create jobs.”
But two years are not enough.
As Sharpe noted, with ambitious goals outlined by President Biden — and in Colorado by Gov. Jared Polis — it makes little sense to end tax credits that incentivize adoption of clean technologies within a few years.
Clean-tech companies represent a major industry in the economy of the Boulder Valley and Northern Colorado, with solar, biofuels, battery, electric-vehicle, wind and other companies driving job creation in an otherwise troubled economy.
From Vestas Wind Systems in Windsor and Brighton to Lightning eMotors in Loveland, companies focused on clean tech have created thousands of jobs in the region. And while we disagree with those who would seek to shut down the traditional energy sector of Weld County, we see the continued rise of renewable-energy technologies and adoption as an economic driver, and a critical response to climate change.
So we view the recent tax-credit extensions as a first step and urge the Biden Administration and Congress to extend them even further. After all, tax incentives for fossil fuels have existed for decades. The Tax Policy Center at the Urban Institute and Brookings Institution estimates that subsidies for oil, coal and gas projects will total $11.5 billion from 2019 to 2023.
Let’s provide similar long-term incentives for clean energy.