President Joe Biden delivered his annual State of the Union address Tuesday night, and in it he nodded to a package of financial incentives that promise to bolster the growth of renewable energy. Historically, these tax credits have been our best tool for growing solar and wind. But despite their ability to help us transform our energy system away from dirty fossil fuels and toward abundant renewable resources, these incentives stand at a crossroads. The reason: Most existing clean energy tax credits are set to expire in the near future, and we must lock in another decade of renewable energy growth - just what President Biden is hoping to achieve.
Now, the full Congress must act. You see, while a robust package of 10-year extensions and updates to the tax credits passed the U.S. House of Representatives, the bill has since stalled in negotiations.
Throughout this process, the American public has remained steadfast in its support for clean energy investments. Environment America recently delivered a letter signed by more than 250 leaders urging Congress to pass climate legislation (and soon). Polling also signals widespread voter approval for the credits.
This support shouldn’t be a surprise considering its passage is expected to will lead to as much as 73% in power emissions reductions below 2005 levels by 2031. Key Sen. Joe Manchin has also said he is ready to support the climate provisions. This clean energy tax incentives package would be an unequivocal win for our planet and our communities, and the president voiced his excitement for this in his speech by saying the consumer benefits of clean energy would include cutting:
“...energy costs for families an average of $500 a year by combating climate change.
Let’s provide investment tax credits to weatherize your home and your business to be energy efficient and get a tax credit for it; double America’s clean energy production in solar, wind and so much more; lower the price of electric vehicles, saving you another $80 a month that you’ll never have to pay at the pump.”
His remarks hint at tax credits’ incredible benefits. New research shows this policy could pay for itself three or four times over, which is an astounding number that has economists jumping for joy at the prospect. Environmentalists are equally excited about the impact the tax credits would have on both ensuring clean air and a liveable planet for generations to come. Since Investment and Production Tax Credits were enacted in the late 2000s, solar has grown 52% annually and wind energy has tripled. A 10-year extension of these incentives will mean even more growth. In fact, it would allow Americans to not only really lean in when it comes to such indispensable tools as solar panels and heat pumps, but also improve the way we weatherize and electrify our homes.
The demand for renewable energy is booming. Just last week, various developers spent $4.3 billion as part of a record-breaking offshore wind lease auction.This sale for rights off the East Coast blew recent oil and gas lease sales out of the water (pun intended). The United States is ready to welcome renewable energy, but it won’t happen without sustained action on clean energy. Passing a package of climate investments right now must be a key component, and Congress must work together and get this done.