The $2 trillion coronavirus stimulus bill passed by the U.S. Senate on March 25 should provide some economic relief to the nation’s households and businesses, but the renewable energy industry is disappointed the bill does not extend investment tax credits and other incentives to keep wind, solar, and other projects moving forward.
Clean-energy industry groups said the bill does not contain extensions of the federal wind Production Tax Credit (PTC) and solar Investment Tax Credit (ITC). The group wanted those included in the stimulus, which is the largest aid package in U.S. history, to alleviate concerns about the loss of the tax credits and the impact on their industries. The groups also were looking to Congress for alternative ways to financially support their projects.
The bill approved in a 96-0 vote by the Senate late Wednesday is expected to be supported by the U.S. House of Representatives, perhaps as soon as Friday, and signed by President Trump. Key elements of the proposal are $500 billion in loans to distressed companies, $250 billion for direct payments to individuals and families, $350 billion in small business loans, and $250 billion in unemployment insurance benefits. It also provides about $130 billion to the nation’s hospitals, and $150 billion for state and local governments hit hard by the coronavirus.
The legislation would provide single Americans a one-time payment of $1,200. Married couples would get $2,400, and parents would see $500 for each child under age 17. The payments start to phase out for individuals with adjusted gross incomes of more than $75,000, and those individuals making more than $99,000 would not qualify. The thresholds are doubled, to $150,000 (based on adjusted gross income) for couples.
Threats to Renewables
The American Wind Energy Association (AWEA) has said the coronavirus pandemic and associated impacts threaten up to $43 billion in investments in wind energy. Wind projects must be completed by the end of 2020 to be eligible for the full PTC. Due to issues with supply chains and labor shortages caused by COVID-19, analysts say several projects are at risk of missing that deadline.
“While we’re disappointed clean energy sector relief did not make it into the phase three stimulus package, we will continue working with Congress and other renewable energy leaders to find solutions to the specific challenges COVID-19 is causing our members,” AWEA CEO Tom Kiernan said in a statement Wednesday.
Solar companies face a mid-April deadline to take delivery of key equipment for some projects, in order to make sure those projects comply with the 5% safe-harbor provisions of the ITC, which would allow them to receive the full 30% credit. The Solar Energy Industries Association (SEIA) has warned that the industry faces a “crisis,” and the potential to lose thousands of jobs, due to disruptions from the pandemic. Abigail Ross Hopper, president and CEO of the SEIA, in a blog post Wednesday said cancellation rates for residential solar systems already are approaching “50% in some sectors,” with companies “reporting 90- to 130-day delays for products.”
Greg Smith, founder of Dayton, Ohio-based Energy Optimizers USA, on Wednesday said in an emailed statement to POWER, “We have terminated the employment of approximately 25 percent of our personnel. We have had over $10 million of projects halt moving forward.” Smith said that impacts the jobs of at least 150 workers.
Not everyone thinks support for renewable energy should be part of the stimulus package. Thomas Pyle, president of the American Energy Alliance, a group that supports the fossil fuel industry, said in a statement Wednesday: “Three full days of dithering for a Green New Deal unnecessarily delayed the financial relief that American families and businesses so desperately need as we fight the coronavirus.”
‘Repowering America’s Economy’
Bob Keefe, executive director of the national business group E2 (Environmental Entrepreneurs), in a statement sent to POWER said, “Congress threw a critical lifeline to America’s workers that will help struggling families pay their bills and make badly needed loans available for businesses to stay afloat and protect jobs. Now attention must turn to repowering America’s economy. And if federal and state lawmakers want to get America back to work, one of the most proven ways is with policies that expand America’s fastest-growing job sector—clean energy—and support the nearly 3.4 million workers employed in every state and county across the country.”
E2 has published a paper, COVID-19 and the Clean Energy Economy, and sent a letter on March 20 to congressional leadership.
Absent measures in the stimulus bill to prop up renewable energy, trade groups for the sector are looking at alternatives, including asking the U.S. Treasury Department to extend the tax credit deadlines, or make a statement to help alleviate investors’ concerns about the industry.
“As I talk to banks, I hear that they are in a panic situation that I haven’t seen since 2008,” said Michael Rucker, CEO of Boulder, Colorado-based wind energy development company Scout Clean Energy, in an emailed statement to POWER.
The stimulus bill, if it passes the Senate, is expected to quickly pass the U.S. House and be signed by President Trump. Gregory Wetstone, CEO of the American Council on Renewable Energy, in a statement said advocates for clean energy likely will look for future legislation to support solar, wind, and other renewables.
“When lawmakers turn their attention to measures aimed at bolstering specific sectors of the economy adversely impacted by the coronavirus, we want to make sure they understand how supply-chain disruptions and other pandemic-related delays are threatening the jobs of hundreds of thousands of workers in the renewable sector and the time-sensitive tax incentives on which renewable project financing depends,” Wetstone said.
The job losses are of immediate concern to those in the renewable energy sector.
“We have 300 direct employees,” said Lloyd Kass, vice president of Lime Energy, an energy efficiency company based in Newark, New Jersey, in a statement emailed to POWER. “Right now, nearly all our utility clients have directed us to stop all site work, grinding our entire business to a halt. If the shutdown continues, we will be forced to furlough or lay off much of our workforce.”