More than 100 organisations representing a variety of clean energy industries have written to the Biden administration urging it to enact a ten-year extension of the investment tax credit (ITC), including a direct pay option.
The Coalition for Clean Energy Jobs and Innovation letter, which addresses President Biden, Speaker Nancy Pelosi, Leader Chuck Schumer, and Republican lawmakers, said the extension would give businesses the certainty necessary for long-term investments in renewable energy.
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A direct pay element to the extension would make project financing less dependent on tax equity – a source of finance said to be still impacted by the COVID-19 pandemic – and will help expedite deployment and overcome pandemic-related challenges, the Coalition argued.
The letter said the ITC had been a key means whereby the electricity sector had reduced its carbon emissions by 40% since 2005, and that an extension would deliver an “unprecedented level of certainty, investment, clean energy deployment, and new jobs”.
Tying into the Biden administration’s own policy ambitions, it noted, “[the ITC extension] is going to be critical since in key sectors deployment will need to be 80% higher than currently projected scenario to stay on track with Administration goals.”
“A long-term extension of the ITC will help our industry achieve better economies of scale, reduce the upfront costs for consumers, and develop innovative financing models,” said Doug Dougherty, CEO of the Geothermal Exchange Organization. “An extension of the ITC will also create thousands of jobs and help our nation reach its climate goals,” he added.
Over 400,000 Americans work in industries supported by the ITC and the solar industry alone will need to grow to more than 900,000 workers by 2035 to support the level of deployment needed to reach President Biden’s 100% clean electricity target, according to the Solar Energy Industries Association (SEIA).
“The solar and storage industry stands ready to put Americans back to work, but Congress must act now to unleash the clean energy economy,” SEIA CEO Abigail Ross Hopper added.