Conservative House Republicans are targeting solar and wind energy subsidies for the chopping block, offering little room for phasing them out or negotiating a one-year extension.
The Republican Study Committee issued its official priorities Tuesday for a "tax extenders" package being negotiated on the Hill.
The priorities present a stark challenge for clean energy advocates. Tuesday's report advises:
- Ending the Wind Production Tax Credit: "For more than two decades, taxpayers have heavily subsidized the wind industry. Extending the wind production tax credit retroactively for just one year would cost taxpayers an estimated $6.4 billion."
- Let the Solar Investment Tax Credit expire: "The solar … tax credit is set to expire in 2016 and should be phased out as scheduled. Residential solar power was a $13 billion market in 2014, eliminating the need for continued government assistance."
On the solar side, some companies are surprisingly supporting the committee's position on letting the tax credit expire.
John Berger, CEO of the third-largest residential solar utility company in the country called Sunnova, is supporting "letting the ITC expire, and believes that industry can stand on its own two feet and even grow without being overregulated and subsidized using unnecessary taxpayer dollars taken from hardworking American citizens," the company said.
Berger is in Washington this week to discuss his position, said a company spokesman. Berger is opposing any proposal in House Ways and Means Committee and the Senate Finance Committee that would extend the solar measure from its expiration date at the end of 2016.
Nevertheless, the Solar Energy Industry Association, the industry's lead trade group, has made it a priority to get the tax credit extended this year. The industry fears they it won't be able to get the extension next year during the 2016 presidential campaign, when the tax credits would become an even bigger target.
Nevertheless, others would like to see the tax credits replaced with a Master Limited Partnership designation for renewable energy. MLPs have been used extensively by oil refiners to leverage capital and reduced tax burdens to grow businesses. There hasn't been serious discussion on such an alternative, although bills have been introduced in recent years.
The Finance Committee passed an extenders package in July that included certain short-term extensions for wind, but did not address the solar credit. The House Ways and Means Committee took up a measure in October that would not extend the measures. But lawmakers are wrangling to reach a final deal on the extenders in both chambers, which could change the final status of the bills.
Environmental groups say allowing the the solar and wind credits to die on the vine would upset the gains clean energy has made in recent years.
"The pace of continued development and deployment of wind and solar power will be greatly affected by whether Congress extends the Production Tax Credit for Wind Power, the [solar ITC] and the Investment Tax Credit for Offshore Wind Power," said Natural Resources Defense Council energy legislative director Elizabeth Noll earlier this month.
"The PTC and the offshore wind credit have already expired; the ITC will disappear at the end of next year unless Congress takes action," she said. "These tax credits help level the playing field for clean energy to compete with fossil fuels which have enjoyed U.S. taxpayer subsidies for decades. The renewable tax credits need to be extended."