IRS conducting in-person tax compliance visits in 3 states
Despite global efforts, tax haven nations — like these 24 — still abound

Wind and other renewable energy sources would benefit from House-proposed tax breaks

Wind map 11-20-2019

Today I'd rather be in the Midwest, say northern Ohio or Michigan, at least as far as the weather. Yeah, it's chillier than I like, but at least it's not so dang windy.

As the screen shot above of the live wind map wind shows, the rest of the country is dealing with some strong gusts.

Locally, we're at around 13 mile per hour sustained wind, with gusts up to 30 mph.

Where wind pays: You'd think I'd be used to the wind. I did, after all, grow up in West Texas, where the wide-open spaces are perfect to spin turbines, both the old-fashioned many-bladed windmills scattered across ranches and now arrays of giant ones in wind farms.

There's plenty of room to position the massive turbines properly for maximum efficiency. And more days than not, the wind blows in the 50-to-60-mph range, the optional speeds for turning wind into the maximum amount of energy.

That's why right now there are more than 40 different wind-power projects in Texas producing more wind power than any other state. The Energy Reliability Council of Texas (ERCOT) says wind power accounted for at least 15.7 percent of the electricity generated in Texas during 2017.

Windmills in Fort Stockton Texas_2006-09-11 13.35.38-2
Wind turbines in my native West Texas (Photo by Kay Bell)

If the Lone Star State were a country, it would rank fifth in the world in wind energy production, as it currently exceeds installed wind capacity in all countries but China, Germany, India and the rest of the United States.

Extending wind energy tax breaks: Those wind projects are why the American Wind Energy Association, as well as 19 other groups representing alternative energy sectors and environmental advocacy, are supporting draft legislation released Nov. 19 by House Democrats.

The proposal, spearheaded by Rep. Mike Thompson (D-California) and 19 of Democratic colleagues on the tax-writing House Ways and Means Committee, would extend tax credits for solar and wind power and electric vehicles. It also would create new tax incentives for used electric vehicles, energy storage systems over 20 kilowatt hour (kWh) and offshore wind.

Thompson hailed the bill, titled the Growing Renewable Energy and Efficiency Now, or GREEN, Act, as "a comprehensive approach to tackling climate change by using the tax code to extend and expand renewable energy use and reduce greenhouse gas emissions."

"Estimates say that climate change will cost Americans more than $500 billion each year by the end of this century. We cannot afford to wait any longer to address this existential threat," said Thompson in a statement announcing the GREEN Act. "This bill will build on existing tax incentives that promote renewable energy and increase efficiency and create new models for technology and activity to reduce our carbon footprint."

Renewed and new tax credits: The parts of the discussion draft highlighted by Thompson and his 23 W&M colleagues who worked on it include provisions to:

  • Promote the use of green energy technologies and incentivize the reduction of greenhouse gas emissions through new and existing tax benefits,
  • Increase energy efficiency and green energy use in both residential and commercial buildings,
  • Support the use of zero-emission transportation and supporting infrastructure,
  • Invest in a green workforce through energy credits for manufacturers,
  • Advance environmental justice through tax credits for research and academic programs, and
  • Require the Treasury Department to analyze the feasibility of a price on greenhouse gas emissions, using the Environmental Protection Agency's Greenhouse Gas Reporting Program.

More specifically on the tax side, the measure would provide the following tax incentives:

 Energy Source

 Type of Tax Break



 Investment Tax Credit (ITC)

 30% tax credit
 extended through 2024
 phasing down to 26% in 2025,
 22% in 2026, and
 10% thereafter


 Production Tax Credit (PTC)

 Extended though 2024 at 60%

 Offshore Wind


 Eligibility through 2024
 or until national capacity is
 3 gigawatt (GW) above capacity
 at the start of 2020

 Expenditures from
 solar electric to
 geothermal heat pumps

 Residential energy efficient
 property credit

 Extends full 30% credit
 through the end of 2024
 Goes to 26% in 2025 and
 22% in 2026 before
 expiring thereafter

 Expenditures from
 solar electric to
 geothermal heat pumps

 New energy efficient
 home credit

 Extends credit
 starting in 2020 through 2024 
 from $2,000 to $2,500
 for new energy efficient units

 Electric Vehicle (New)

 Electric Vehicle (EV)
 credit (existing)

 Credit reduced by $500
 but extended to
 manufacturer EV sales
 between 200,000 & 600,000
 (Current credit phaseout
 begins at 200,000 vehicle sales)

 Electric Vehicles (Used)

 EV credit (new)

 Credit for buyers of used
 plug-in EVs through 2024
 for a base of $1,250
 (to the lesser of either $2,500
 credit or 30% of sale price)

Source: GREEN Act discussion draft Section-by-Section description  

Legislative vehicle options: Rep. Richard E. Neal (D-Massachusetts), chair of the Ways and Means Committee, also threw his support behind the GREEN Act, indicating the framework it could soon get a review by the full tax-writing panel.

"The climate crisis requires bold action, and I'm pleased that we're using legislative tools at the Ways and Means' disposal to create green jobs, reduce carbon emissions, and heal our planet," said Neal.

However, with time running out on 2019 and the work days scheduled by the House and Senate, action on the GREEN Act is far from certain.

It's possible that when (if?) federal lawmakers finally get around to addressing the expired/expiring tax breaks known as extenders, and which already include some energy provisions, the GREEN Act language could be included in that measure.

There also could be an effort to attach the energy measures to must-pass legislation, such as a final federal government fiscal year spending bill. The House on Nov. 19 passed a continuing resolution to keep the government operating through Dec. 20. The Senate is expected to pass the measure soon, with the White House indicating it would sign the short-term funding extension.

UPDATE, Nov. 21: Short-term spending bill signed, averting government shutdown. Next deadline is Dec. 20.

But as for longer-term tax legislation, energy-related or otherwise, the prospects on the other side of Capitol Hill are less clear.

While some energy tax credits, such as energy storage, have bipartisan support, there is more division between the Senate's Republican majority over how or even whether to address these issues now.

And, as noted, time is short.

You might also find these items of interest:





Feed You can follow this conversation by subscribing to the comment feed for this post.

The comments to this entry are closed.