A group of Republican congressmen has introduced a bill that aims to remove the accelerated deadlines for the renewable energy Investment Tax Credit (ITC) and Production Tax Credit (PTC), two key components of the Biden-era Inflation Reduction Act (IRA) that saw their timeframes shortened dramatically by the Trump administration last year.
The new bill is dubbed the American Energy Dominance Act, and was introduced by Pennsylvanian Republican Brian Fitzpatrick, who was supported by New York’s Mike Lawler and Ohio’s Max Miller and Mike Carey. The bill includes a number of provisions, including the extension of the 45V Clean Hydrogen Production Credit construction deadline, but of greatest relevance to the solar industry would be the support for the ITC and the PTC.
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Both tax credits were introduced by the Biden administration through the IRA and had their timelines significantly shortened by Trump last year in his ‘One Big, Beautiful Bill’ Act (OBBBA). In order to qualify for the tax credits, solar and wind PV developers currently have to start construction at their products by July this year, and reach commercial operation by the end of 2028, and PV Tech Premium has heard how both the shortened timelines and a lack of clarity over the interpretation of the “start of construction” rules has created significant uncertainty for US renewable energy developers.
The American Energy Dominance Act would tackle this uncertainty by extending the current deadline for the PTC, also known as the 45Y Clean Energy Production Credit, to a calendar year in which US “annual greenhouse emissions from the production of electricity” are equal to or less than 25% of emissions from electricity generation in 2022.
Regarding the ITC, which is also known as the 48E Clean Electricity Investment Credit, the new bill would remove a paragraph from the law that removes ITC eligibility for any renewable energy project “placed in service by the taxpayer after December 31, 2027”.
“If America wants to lower costs, strengthen its energy supply, and build with confidence for the future, then we need a policy framework strong enough to support the scale of that work,” said Fitzpatrick.
“That means certainty. When the rules are unstable, projects stall, hiring slows, investment hesitates and the people counting on progress pay the price.”
Prioritising US energy independence
Perhaps most striking is the framing of the new bill, not as an effort to improve the US’ renewable energy generation capacity, but as a means to secure energy independence. Not only is this evident in the name of the bill—‘the American Energy Dominance Act’—but in Fitzpatrick’s commentary on its benefits.
“This bill is a pro-worker, pro-growth, pro-America solution that will help drive investment, strengthen domestic energy production, expand affordability and ensure the next chapter of American growth is built here at home by American workers,” he said.
Fitzpatrick also noted that the bill was developed “in direct partnership” with the North America’s Building Trades Unions (NABTU), suggesting that domestic generation of electricity, and the use of domestic workers to build these generating facilities, are key motivating factors behind this Republican effort to effectively overturn a series of changes made by Trump last year.
The importance of securing a domestic supply of electricity has been brought into sharp focus by the current conflict in the Middle East, with Iran closing the Strait of Hormuz in response to US-Israeli airstrikes in the area. Last week, policy institute the Center for American Progress reported that Americans were paying around 35% more for gas in April than in February, prior to the war, and cited figures from thinktank the Pew Research Center that show 69% of Americans are concerned about high gas prices as a result of the conflict.
Even prior to the conflict, the US solar sector had placed a greater emphasis on building domestic manufacturing capacity; within the last year, US developers have advanced domestic wafer, cell and module production as they look to reduce reliance on solar products imported from overseas.
“Amid soaring electricity costs and tens of billions in clean energy projects getting cancelled and delayed across the country, this is a modest—but smart—step back in the right direction,” said Bob Keete, executive director of US business group E2, who pointed towards growing bipartisan support for methods taken to improve US energy independence.
“Lawmakers on either side of the political aisle are beginning to realise that there shouldn’t be anything political or partisan about cheaper energy, more efficient homes and the jobs, investments and energy security that comes with building more clean energy.”
