UPDATE: July 3, 2020: The House on Wednesday passed the Moving Forward Act, which includes the GREEN Act as well as the INVEST Act.
"In addition to key tax provisions that will be especially helpful in realizing the full potential of clean energy technologies, this forward-looking infrastructure package also includes commonsense first steps toward a 21st century Macro Grid that will deliver job growth and economic development, a cleaner environment and lower costs for consumers," American Council on Renewable Energy CEO Gregory Wetstone said in a statement.
House Democrats on Thursday unveiled a comprehensive bill that would boost federal tax incentives for solar, storage, offshore wind, electric vehicles and more.
The GREEN Act is the latest attempt by Democrats to include clean energy aid in federal recovery efforts, but bipartisan support for the legislation has not emerged.
Congress has passed three stimulus packages since the U.S. economy began its rapid decline following shutdown orders in March. But despite the loss of over 620,000 jobs in the clean energy sector, or 18.5% of its workforce, and calls from advocates, policy experts, economists and others for a green recovery package, federal lawmakers have yet to pass legislation that directly addresses the renewables industries' needs.
"We know we need major stimulus policies to generate immediate and long-term economic activity, and speed up the recovery. And we know that infrastructure investments in job-rich, high-growth areas like clean energy are a smart way to do it," Ryan Fitzpatrick, director of the Climate and Energy Program at Third Way told Utility Dive in an email. "What we don't know is whether the White House and the Republican-led Senate will face reality and get moving on robust stimulus solutions like the House has been."
The House is expected to bring the GREEN Act to the floor Tuesday as part of a larger $1.5 trillion green recovery package — the Moving Forward Act — which includes the $494 billion comprehensive transportation bill, among other policy directives.
But despite support from the wind, solar, energy efficiency, electric vehicle and energy storage industries, Republicans have been wary to include clean energy support in a broader infrastructure bill.
Some Republican Senators have acknowledged the renewable energy sector's position and made pushes elsewhere to extend aid through tax credit changes, but no Republican in the Senate has indicated they would be on board for including the sector in a broader infrastructure bill, Sen. Chris Van Hollen, D-Md., told reporters during a virtual zoom meeting earlier this month.
"We've made it clear, some of us, with our Republican colleagues that when we take up an infrastructure modernization bill, that clean energy needs to be a part of that," he said.
"I cannot report as of right now that you have a lot of Republicans in favor of establishing a clean energy financing mechanism," but such a mechanism would likely be more favorable to Republicans than alternatives, he said.
The Moving Forward Act
Before the GREEN Act's inclusion, the Moving Forward Act would invest more than $70 billion in upgrading the electric grid to accommodate more renewable energy, integrate electric vehicle charging and support greater resilience and energy efficiency.
But the GREEN Act's inclusion is a game changer, according to multiple industry groups, including the American Wind Energy Association, the Solar Energy Industries Association and the Energy Storage Association, as well as energy policy observers.
"I'm quite encouraged by the GREEN act, as well as the Moving Forward Act," Narayan Subramanian, a fellow at progressive research group Data for Progress told Utility Dive. "I think, taken together, you're actually finally seeing that convergence around exactly what a green stimulus can look like."
House Democrats who introduced the GREEN Act do not yet have an estimate for how much money it's expected to cost, a spokesperson for Rep. Mike Thompson, D-Calif., one of the bill's 48 cosponsors, told Utility Dive in an email.
The bill would build on existing tax credit structures, expanding the solar and wind investment tax credits (ITC) by five years, as well as the wind production tax credit (PTC). It would also include a direct pay incentive for solar and wind projects, as well as "enhanced incentives" for offshore wind investments and geothermal, and provide new tax credits to incentivize investments in energy storage, biogas and waste-to-power.
"We applaud Chairman Thompson and Chairman Neal for introducing the GREEN Act, which would go a long way toward providing a stable and effective policy platform for clean energy deployment over the next five years," Gregory Wetstone, CEO of the American Council on Renewable Energy, said in a statement. "In addition to the PTC and ITC extensions, the energy storage, offshore wind and direct pay provisions would be especially helpful in realizing the full potential of the renewable energy sector."
That praise was echoed by others: The offshore wind energy industry is poised to add another 83,000 jobs and $25 billion of annual economic output, said Tom Kiernan, president and CEO of AWEA. "Timing is crucial here to provide needed support for the wind industry as we work to overcome the significant challenges caused by COVID-19."
"The specific elements for solar in the GREEN Act, specifically, an extension of the solar investment tax credit, as well as the refundability element is really welcome support for solar which has already lost 75,000 jobs due to the pandemic and needs relief," Adam Browning, executive director at Vote Solar told Utility Dive. "I would also say that this is the bare minimum of the possibilities of solar and clean energy's ability to catalyze economic recovery. There's a wonderful opportunity to put America to work dealing with this crisis, while simultaneously preventing the next crisis, that of climate change."
A critical rift
But the green recovery package is missing at least one critical element — bipartisan support.
"Our concern for the GREEN Act, first of all, is that it's a partisan proposal. It wasn't crafted in a bipartisan manner," Charles Hernick, vice president of policy and advocacy for conservative clean energy group Citizens for Responsible Energy Solutions told Utility Dive.
Senate Majority Leader Mitch McConnell, R-Ky., wants to focus more on relief right now and address issues like longer-term infrastructure investments later, he said, potentially through again bringing to the floor a comprehensive energy bill introduced in February by Sens. Lisa Murkoswki, R-Alaska, and Joe Manchin, D-W.Va. — the American Energy Innovation Act.
"We need to take the appropriate amount of time to understand how big of a hole needs to be plugged by the federal government, because we don't want to overdo it or under do it," said Hernick. "We want to be precise with what's COVID relief, and then once we understand what the unemployment situation and economic outlook is for the next few years, design a stimulus package that will fit that need."
Overall, the clean energy sector needs to be better in engaging both sides of the aisle, said Subramanian.
"The 600,000 jobs that have been lost in the clean energy sector are not in blue states alone, they're also affecting red states," he said. "So I think if we lean into that argument, that this is actually necessary for the short-term recovery, that we're talking about hundreds of thousands of jobs, I think that's how we can start building bipartisan consensus on this issue at this moment."
There is also more that could be done about environmental justice, he said, including engaging laid off fossil fuel workers into a broader conversation around job training.
"One way of winning support from Republicans for this would be to also extend these job training programs to … communities that are going to be hard hit by the clean energy transition, which ranges from states like West Virginia, all the way down south," Subramanian said.
Charting a path forward
Previous efforts to bring forward clean energy inclusion have largely fallen on their face — McConnell and President Donald Trump pushed back on industry's efforts in March to extend solar and wind tax credits, accusing Democrats of trying to revive the Green New Deal, a legislative package introduced by Rep. Alexandria Ocasio-Cortez, D-N.Y., in February of last year. House Majority Leader Nancy Pelosi stepped back on pushing for an infrastructure and clean energy stimulus package as discussions began on potential new legislation in April.
But energy and infrastructure conversations have historically been bipartisan and there are indications that both sides may come together, according to Subramanian, Hernick, Browning and others.
A bipartisan group of senators in April urged the Department of Treasury to extend safe harbor deadlines for the PTC and ITC, and the Internal Revenue Service responded in May with modifications to the credits to allow solar and wind projects to meet deadlines and continue construction. A Republican-led letter later urged Treasury to take additional steps to provide the solar industry aid.
"Republicans are very aware of the fact that [clean energy] needs to be a key component of any national infrastructure modernization plan," said Sen. Van Hollen. He and others expect the Senate to act on more recovery-focused legislation mid-July, though he says it's likely that a longer-term stimulus package might not come until this fall.
Although McConnell has thus far "thrown some cold water" on clean energy efforts, "that's not to say that Republicans don't want to do anything on modernizing infrastructure," he said. "But they've been talking about maybe doing something later in the year. And … obviously if we actually did take something up later in the year and get something done, that'd be fine."