Energy & Environment

Democrats eye tax credit assistance for renewables in infrastructure bill

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Democrats are pitching a series of environmental measures, including tax credit assistance for renewables and carbon capture technology, as part of a broad transportation bill released Monday.

The legislation, called the Moving Forward Act, would also restrict the transportation of liquified natural gas (LNG) by rail and create a grant program aimed at reducing consumption of a class of cancer-linked chemicals called PFAS. 

House Democrats announced the $1.5 trillion infrastructure plan on Thursday, billing it as a major effort to fight climate change, and released the full text of the measure on Monday. 

Speaker Nancy Pelosi (D-Calif.) said last week that it would “make real the promise of building infrastructure in a green and resilient way.”

The legislation also aims to increase funding for repairing roads and bridges and expand broadband access in rural communities. 

In the energy sector, the bill would extend two tax credits that can be claimed by renewable energy producers.

It will allow companies that start construction on certain wind, biomass and hydropower facilities by the end of 2025 to claim the production tax credit, which can be claimed by companies that produce electricity from renewable sources.

The legislation would also expand the commercial use of the investment tax credit (ITC), which allows claimants to receive a portion of the cost of installing certain renewable energy facilities as a tax credit. 

Democrats are proposing the extension of the ITC for solar and geothermal energy at a 30 percent rate through the end of 2025, phasing it down for a few years until it eventually reaches 10 percent. They also want to expand the credit to include energy storage technology. 

Their legislation would also expand the tax credit for carbon capture and sequestration technology, which takes carbon out of the atmosphere, by two years until the end of 2025. 

Lawmakers on both sides of the aisle have called for some assistance for this industry. More than 600,000 clean energy jobs, including nearly 100,000 renewable power generation jobs, have been lost since the start of the coronavirus pandemic.

The Moving Forward Act would also restrict the transportation of LNG by rail after the Trump administration recently issued a final rule authorizing the bulk transportation of the substance by rail. 

It would require the Transportation Department to rescind any previous authorizations and halt any new ones until the department conducts further safety evaluations.

It would also direct the administration to start a probe into safety and environmental risks of transporting LNG. 

The Democratic bill would also aim to tackle PFAS chemicals, which are often found in water and are known for their persistence in the environment and human body, by creating a grant program to help utilities pay for costs of treating them.

Tags Nancy Pelosi Renewable energy Tax Credit Assistance
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