House committees this week advanced “clean energy” portions of the $3.5 trillion reconciliation plan along party lines, including several measures supported by The Real Estate Roundtable.
Clean Energy Tax Incentives
- The Ways & Means Committee this week approved “green energy” portions of the reconciliation package. (Bill text [Subtitle G); section by section)
- The Committee approved significant changes to existing tax credits that incentivize investments in solar, wind, combined heat and power (CHP) and fuel cell systems – and expanded them to also include energy storage and dynamic glass properties.
- These renewable energy investments would be subject to an “elective pay” option that can allow entities with little appetite for tax credits to request a payment equal to the value of the credit.
- Investments in EV charging stations and high-voltage transmission lines (needed to support delivery of renewable power over long distances) would also benefit from the elective pay option.
- The Committee also made changes intended to improve the 179D tax deduction for energy efficient buildings. The proposed changes are geared to support existing building retrofits.
- The amounts of these incentives would start at a “base rate” – and could increase to a “bonus rate” if the property owner meets certain labor provisions for Davis-Bacon wages and hiring registered apprentices.
Climate and Energy
- The House Energy and Commerce (E&C) Committee passed a $456 billion section of the reconciliation bill. (Bill text / Committee memorandum, Sept. 9 and Markup summary, Sept. 13)
- The centerpiece of the E&C package is a Clean Electricity Performance Program (CEPP). It would offer federal Energy Department “incentive payments” to electric utilities that meet clean energy targets and shift to zero-emissions sources (i.e., nuclear, hydropower, wind, solar, geothermal).
- A nationwide CEPP could accelerate “greening” the grid and help real estate and other sectors accommodate increasing demands from investors and regulators to source the electricity they purchase from renewable power.
- However, Sen. Joe Manchin (D-WV), chair of the Senate Energy and Natural Resources Committee and a key centrist vote needed for ultimate passage of a reconciliation package, has questioned the need for the CEPP program. He has stated that utilities should not receive taxpayer funds because the electricity sector’s’ transition to clean power sources is already happening. (Politico and E&E News, Sept 14)
Other elements of the E&C Committee’s bill include:
- Grants for state/localities to adopt most recent and zero-energy building codes; and
- A rebate program for electric vehicle charging infrastructure with set asides for individuals, small businesses, and low-income communities.
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