Spending bill pumps new energy into wind, solar

With action in Congress and change in administration, the future is likely to have brightened considerably for the renewable-energy industry, including firms in the Boulder Valley and Northern Colorado.

Investment in wind and solar energy had stagnated because of uncertainty over whether tax credits would continue. But when the November election and subsequent U.S. Senate runoff in Georgia guaranteed a White House and Congress friendlier toward renewables, lobbyists for wind and solar industries breathed sighs of relief.

Congress in December agreed on legislation that would extend the federal investment tax credit for solar projects for two years and the production tax credit for wind projects for one year. Those and other alterations in energy policy were part of an omnibus spending bill for 2021 that also included a $900 billion COVID-19 relief package.

SPONSORED CONTENT

Business Cares: April 2024

In Colorado, 1 in 3 women, 1 in 3 men and 1 in 2 transgender individuals will experience an attempted or completed sexual assault in their lifetime. During April, we recognize Sexual Assault Awareness Month with the hopes of increasing conversations about this very important issue.

The wind tax credit will continue to apply at 60% of the allowable amount for any project for which construction begins by the end of this year.

The solar tax credit still will apply at 26% of eligible costs for commercial projects that start construction by the end of 2022 but would drop to 22% in 2023 and then 10% indefinitely. The residential credit also will be 26% through the end of 2022, but will drop to 22% in 2023 and 0% in 2024. It could be extended by future Congresses.

Companies that start building solar projects this year still will have a four-year period to bring them online to take advantage of the investment tax credit.

Lobbyists for the wind and solar industries have been quick to applaud the action.

“Stable policy support will help ensure that wind and solar can continue providing the backbone of our country’s electricity growth,” said Heather Zichal, chief executive of the American Clean Power Association, in a prepared statement. That association, launched Jan. 1, attracted members including major electric utilities, solar and offshore wind developers, and wind-turbine manufacturer Vestas, which has plants in Windsor, Brighton and Pueblo, as well as tech giant Google, which has a massive campus in Boulder.

Zichal was an energy and climate adviser for President Barack Obama who helped oversee the creation of his Clean Power Plan. Last year she advised Joe Biden’s presidential campaign on climate issues.

For Jason Sharpe, chief executive and co-owner of 16-year-old Namaste Solar, an employee-owned contractor and installer based in Boulder, “the main thing it means for us is longer-term stability,” he said. The tax credit “was going to end Jan. 1, 2022, and that amount of uncertainty is difficult for businesses to handle. Do we grow? Do we retract? We didn’t know.”

Namaste’s projects are about half and half between commercial and residential projects, Sharpe said. The company employs about 180 people, he said, but might have had to reduce its workforce by 20% to 30% had the extension not been approved.

“Now, we’ve got two more years of a stable market,” he said, “and we’re excited to grow and create jobs.”

Sharpe said there’s more Congress could do, however.

“Climate change is the greatest issue facing humanity,” he said. “Most people have goals of 2035 or 2050 for reducing greenhouse-gas emissions, so it doesn’t make sense to me if we have a 2035 goal but incentives for just two years. I’d like to see those incentives more in line with those of the governor and the new administration. Two years does not get us to 2035.”

More immediately, he said, what the solar industry needs most now is workers.

“Small businesses in solar are the greatest job creators in the country,” Sharpe said. “We see supporting solar as part of the pandemic recovery. We think we can be an important part of getting people back to work.

“But we’re lacking apprentices. We need people for these skilled trades. Government could help by supporting diversity in the workforce and helping create job opportunities for solar workers in the skilled trades,” he said. “An alternative to secondary education is to become a licensed electrician.

“People need jobs, the industry needs people, and what we need is the training to help people be part of this industry. That’s the way the solar industry can increase equity and social justice – through workforce development and training.”

The legislation passed in December also included funding for research and development — including $1.5 billion for solar and $625 million for wind — as well as mandates to boost offshore wind farms, study new ways to use coal and make the Federal Energy Regulatory Commission more accessible to the public through a new Office of Public Participation.

According to the bill, the U.S. Department of Energy must set new national goals for renewable production on public land by September 2022, and must issue permits for at least 25 gigawatts of clean-electricity generation by 2025.

The renewable-energy industry didn’t get everything it wanted, however. It failed to win a provision allowing financiers of wind or solar projects to get direct payments from the government instead of tax credits, as well as a stand-alone tax credit for energy storage. It did, however, win funding for new research and development efforts for energy storage.

See related story: Xcel, Boulder charge ahead on EVs after vote