The House Ways & Means Committee has voted to advance a package of tax credits that will incentivize clean energy, electric vehicles, and the manufacturing of clean energy technology and component parts. This package will be a critical part of helping the U.S. meet our pledge to the international community to reduce greenhouse gas emissions by 50-52% by 2030.
“We are encouraged by Chairman Neal and the Ways and Means Committee’s plan to drive investments in clean energy and transportation,” said Elizabeth Gore, Senior Vice President, Political Affairs. “Extending and expanding a wide range of incentives for renewable energy technologies, energy storage, electric vehicles, charging infrastructure, energy efficiency, and other technologies that reduce carbon emissions will help us make significant progress on climate action, and drive economic and job growth in the process. We thank Chairman Neal for his leadership.”
As currently written, the legislation would extend current tax credits for clean energy technologies:
- Clean Electricity Generation: Credits will be extended at full-value for 10-years.
- Solar Generation: In addition to the investment tax credit (ITC), solar energy facilities will now have the option to utilize the production tax credit (PTC).
- Direct Pay: Allows project developers with little or no tax equity to still benefit from the tax credits for installing certain clean energy technologies.
- Environmental Justice: Solar facilities that benefit and engage low-income communities receive an additional 10 percent investment tax credit.
- Labor Provisions: The value of the credit is reduced significantly for any project that fails to pay prevailing wages or employ certain levels of apprentice labor. A bonus incentive is granted for facilities that meet domestic content requirements of 55% or greater, to drive growth of domestic manufacturing, though beginning in a few years any failure to meet this threshold leads to a phase-out of direct pay.
The legislation would also spur the deployment of electric vehicles and charging stations:
- Light-duty vehicles: The manufacturing cap has been lifted and consumers could receive an electric vehicle tax credit for up to $12,500 for a vehicle assembled at a U.S. facility that operates under a collective bargaining agreement and that uses batteries manufactured in the U.S.
- Medium and heavy duty trucks: A new credit for commercial vehicles is established, covering up to 30% of the cost of the vehicle.
- Charging infrastructure: The alternative fuel vehicle refueling property credit is extended and expanded to cover up to $100,000 of the cost of installing charging ports, plus an additional 20% for qualifying commercial ports.
- Used EVs: A new refundable credit for the purchase of a used EV is established. The base credit is $1,250, with additional incentives for battery capacity up to $2,500.
Photo Credit: Oregon Department of Agriculture
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