Bipartisan tax proposal to promote clean energy technologies launched in the US

Facebook
Twitter
LinkedIn
Reddit
Email
The bipartisan proposal aims to accelerate the development of clean energy technologies through investment and production tax credits.

Two US Senators have introduced a bipartisan energy tax proposal to encourage innovation in the clean energy sector and rapidly scale up new technologies.

Senator Mike Crapo (R-Idaho), ranking member of the US Senate Finance Committee, and Sheldon Whitehouse (D-Rhode Island), US Senate Finance Committee member, introduced the Energy Sector Innovation Credit (ESIC) Act yesterday.

The ESIC is a technology inclusive, flexible investment tax credit (ITC) or production tax credit (PTC) designed to encourage innovation across a range of clean energy technologies, including generation, storage, carbon capture and hydrogen production.

It seeks to promote clean energy innovation by providing up to 40% ITC or 60% PTC for low market penetration technologies across a variety of energy types. It will then phase out credits as technologies mature, which allows access for the most innovative products, rather than allowing Congress to pick winners when credits expire.

It looks to group technologies into different cohorts as determined by the Department of Energy (DOE), national labs and other stakeholders. It also provides an avenue for “unforeseen” technologies to be eligible for ESIC through an expedited-consideration process by the DOE and Congress.

“ESIC will incentivise technology-wide clean energy innovation so new, clean technologies can rapidly scale up and compete independently in the market,” said Senator Crapo. “Moreover, ESIC automatically scales down credits as technologies’ market penetration ramps up, so taxpayer dollars do not subsidize market-mature technologies.”

“Our bipartisan legislation will accelerate nascent clean technologies that have the potential to compete against heavy-polluting forms of energy and create good jobs in the process,” added Senator Whitehouse.  

Original co-sponsors of the Senate legislation include Senate Finance Committee members John Barrasso (R-Wyoming) and Michael Bennet (D-Colorado) and Senate Energy and Natural Resources Committee members Jim Risch (R-Idaho) and John Hickenlooper (D-Colorado).  House Ways and Means Members Tom Reed (R-New York) and Jimmy Panetta (D-California) have introduced identical legislation in the U.S. House of Representatives.

Last month, US-based solar manufacturers lauded another tax credit proposal by Democratic Senator Jon Ossoff that would establish new tax credits to rapidly boost American solar manufacturing and drive down “prohibitive costs”, branding it a “new hope for American solar”.

The Bill, however, is considered unlikely to pass in its current guise due to Republican opposition, according to US sources.

Read Next

September 19, 2022
The US Department of Energy (DOE) has released more details about, and sought more engagement with, its Interconnection Innovation e-Xchange (i2X) programme at RE+ in Anaheim, California.
August 23, 2022
The Inflation Reduction Act (IRA) is expected to add an extra US$110 billion in investment for utility-scale solar in the US by 2030, increasing the country's utility-scale deployment by more than 70GW.
PV Tech Premium
August 22, 2022
PV Tech Premium has examined the current state of community solar in the US and has broken down what the Act means for the sector moving forward.
August 17, 2022
US President Joe Biden has signed the Inflation Reduction Act (IRA) into law, representing the largest climate package in US history and a major policy victory for the embattled president.
August 15, 2022
The US House of Representatives on Friday passed the Inflation Reduction Act (IRA). The largest climate package in US history will now move to the desk of President Joe Biden, where it is expected to be signed into law as early as today.
August 11, 2022
The US government Department of Energy is looking for public input into how US$675 million of funding for R&D into Critical Materials should be best directed.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
September 27, 2022
15:30 AEST (UTC +10)
Solar Media Events
October 4, 2022
New York, USA
On-Demand Webinars, Solar Media Events
October 11, 2022
Virtual event
Upcoming Webinars
October 18, 2022
10am (EDT) / 4pm (CEST)