House releases tax credit to incentivize new clean energy sources
WASHINGTON – Reps. Tom Reed, R-Corning, and Jimmy Panetta, D-Calif., have released a discussion draft of the Energy Sector Innovation Credit Act, a bipartisan bill to encourage U.S. energy market innovation and tackle the challenges presented by climate change.
“Our climate is changing. There is no denying this,” Reed said. “We must unleash the greatest asset we have available to prevent this pending crisis – the power of American ingenuity and innovation. This tactic has proven time and time again to solve world problems – and this situation will be no different. By offering a tax incentive for new energy technologies we will increase energy on the grid, ensure unneeded energy is not financially rewarded and thus unnecessarily produced, help cutting-edge technologies break into the market, incentive older energy sources to innovate and slash global emissions.”
The Energy Sector Innovation Credit is a technology-inclusive, flexible investment tax credit or production tax credit designed to promote innovation across a range of clean energy technologies, including generation, storage, carbon capture, and hydrogen production. The legislation would:
¯ Promote clean energy innovation by allowing up to a 40% investment tax credit or 60% production tax credit for low market penetration technologies across a range of energy sources, including renewables, fossil fuels, and nuclear.
¯ Phases out credits as technologies mature, which provides an on-ramp for the most innovative technologies to get to market and then compete on their own, rather than allowing Congress to pick winners and losers when temporary credits expire.
¯ Groups technologies that are substantively different from one another as determined by experts at the Department of Energy, national labs, and other stakeholders.
¯ Provides flexibility for unforeseen clean energy technologies to be eligible for ESIC by including an expedited consideration provision for Congress to take up new technology recommendations from DOE.
“To fully confront our climate emergency we must utilize every tool available, and fully invest in clean energy innovation through our tax code. New technologies have the promise to be more efficient than current technologies and help us more quickly hit emissions reductions targets. Unfortunately, many of these technologies can’t yet compete in the marketplace, and won’t be able to scale without help,” Panetta said. “That’s why I’m proud to introduce the bipartisan, bicameral Energy Sector Innovation Credit, which provides tax incentives for next-generation technologies that can further improve energy efficiency and reduce emissions. Getting these cleaner technologies to market faster will complement our efforts to reduce emissions through wide-scale deployment of existing technologies. To fight climate change, we must attack it with all of the resources we can.”