Energy & Environment

Renewables welcome ’11th hour reprieve’ from Manchin

Sen. Joe Manchin (D-W.Va.) arrives to chair a hearing of the Senate Committee on Energy and Natural Resources.
J. Scott Applewhite/The Associated Press
Sen. Joe Manchin (D-W.Va.) arrives to chair a hearing of the Senate Committee on Energy and Natural Resources.

The renewable energy sector is feeling a rare jolt of optimism over the announcement of a Senate deal on a Democrats-only reconciliation bill, weeks after hope seemed lost.

Sen. Joe Manchin (D-W.Va.) had dealt renewables a one-two punch after first saying in December that he would not support President Biden’s Build Back Better package and then announcing months later that he would not back the climate provisions in a reconciliation package, which could clear the 50-50 Senate without any cross-aisle support.

On Wednesday night, however, Manchin and Senate Majority Leader Charles Schumer (D-N.Y.) unveiled an agreement that would provide billions for the sector. 

Their deal includes a $7,500 tax credit for new clean vehicles and a $4,000 tax credit for used ones. It also features tax credits aimed at solar panel and wind turbine manufacturing and $40 billion to incentivize state utilities to transition to renewable energy sources.

In previous negotiations, the electric vehicle provisions were one of Manchin’s major sticking points, with the West Virginia Democrat specifically objecting to a credit for vehicles produced by union labor. That provision does not appear in the agreement released Wednesday. 

Should the measure become law, American Council on Renewable Energy CEO Greg Wetstone predicted a “tremendous increase in investment with the benefit of the policy certainty that this bill brings.” 

“I think Congress has stepped to the climate challenge in a way we have not seen before, and this bill is going to put us in the game,” Wetstone said. “It’s not a given that we can meet our ambitious targets, but we’re going to be in the ballpark.” 

The Biden administration has laid out a target of reducing U.S. emissions by half by 2030. The package unveiled Wednesday would cut emissions by 40 percent in that time frame, according to Manchin, the same goal as the initial Build Back Better package. 

Heather Zichal, CEO of American Clean Power, called the bill “an 11th hour reprieve for climate action and clean energy jobs, and America’s biggest legislative moment for climate and energy policy.” 

“Congress now is inches away from passing a $369.75 billion investment in energy security and climate change programs over the next ten years — the biggest climate and clean energy investment in American history,” Zichal said in a statement. “Passing this bill sends a message to the world that America is leading on climate, and sends a message at home that we will create more great jobs for Americans in this industry.”

The solar power and storage industries say they are “incredibly optimistic” about the newly announced deal.

“We think it provides a pretty clear roadmap for the manufacturing sector, which is a critical part of our of our progress and we think that the environmental justice and prevailing wage and apprenticeship pieces will ensure that the future that we’re investing in will be available to everyone,” said Solar Industries Energy Association President and CEO Abigail Ross Hopper. 

And Ben Prochazka, executive director at the Electrification Coalition, said the group sees the package as both welcome news and hastening the inevitable. 

“Transportation electrification ultimately is the future of transportation. And it’s really just a question of, when, not if,” Prochazka told The Hill. The Manchin-Schumer agreement, meanwhile, “creates a lot more certainty and a lot more opportunity for the US to maintain its leadership in the automotive sector, as we transition” to electric transportation, he said.  

The renewable industry has made no secret of the instability created by Congress’s unreliable climate action. In February, The Washington Post reported numerous investors were holding off on billions in planned projects due to the lack of clarity around whether the government would create corresponding tax incentives. 

Manchin’s announcement comes at a pivotal moment: Should Democrats lose control of one or both chambers of Congress in November, the door will almost certainly slam on major climate legislation for the foreseeable future. But industry figures said the new bargain would inject the market with a level of stability that allows it to continue to grow during a potential period of divided government. 

Even if gridlock worsens, “I think we’re going to see not just the movement toward our climate targets, but also important economic growth in red states and blue that [is] going to be helpful in building awareness of the role that clean energy can play in driving economic growth and creating jobs,” Wetstone said.  

“Obviously, we’re in an intensely partisan time, but if you can step back and look at to solar policy in general and storage policy in general, and Republican support for it,” Hopper said. “And so I think that will not erode.” 

Though Republicans are unlikely to support a more robust climate agenda in general, Hopper said the results from the package will likely speak for themselves when it comes to new jobs and investment, including in red districts. 

Prochazka said that parts of the package will continue to pay dividends even if Republicans take back power, such as the removal of the cap on tax credits for plug-in electric vehicles.

“On a per manufacturer basis, we [would] no longer have that limitation, and that’s really important in the marketplace,” he said.  

“At the end of the day, I think that there’s a lot of places that, assuming this passes, this will really chart a course for the future that creates a lot more certainty for transportation electrification,” he added. 

Tags Abigail Ross Hopper Biden Charles Schumer Climate change climate change legislation green energy Heather Zichal Joe Manchin Reconciliation reconciliation package Renewable energy renewables

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