On November 19, the House of Representatives passed President Biden’s Build Back Better Act. The Act now moves to the Senate, where it will be put to a vote in the coming weeks. The $1.75 billion spending bill includes a significant $555 billion in clean energy and climate-related investments. Below, we will take a look at what the BBB Act could mean for the renewable energy sector, with a focus on solar energy in particular. This $555 billion total would be the largest ever investment in the clean energy sector by Congress.
Build Back Better: What Does It Mean For Solar?
The Build Back Better framework includes a number of provisions for investment in the solar sector. These include a ten-year extension of the solar investment tax credit (ITC), along with tax credits which will support the domestic manufacture of equipment for solar PV systems. Additionally, there are plans for investments which will modernize grid infrastructure, allowing for easier deployment of renewable energy sources like solar. If we break down the $555 billion set aside for clean energy and climate investments, the majority—$320 billion—is going towards the expansion of tax credits for utility-scale and residential clean energy, transmission & storage, and the manufacturing of clean energy. An additional $110 billion will be put towards targeted incentives to spur domestic supply chains and technologies like solar and batteries.
Build Back Better: The Solar Highlights
Among the most notable solar provisions in the BBB Act are the restoration of the full values of both the production tax credit (PTC) and the investment tax credit (ITC). Additionally, taxpayers will be eligible for direct pay rather than tax equity offsets as the direct pay (25D tax credit) has survived the bill’s passage through the House. Following calls from a coalition of over 50 environmental, renewables, and transportation groups, the BBB plan would also create a new ITC for standalone energy storage systems. There’s positive news for electric vehicles too, with the cost of a domestically-produced EV set to drop by $12,500 as a result of the BBB Act. The White House has high hopes for the bill, stating that the benefits arising from its passage would include a reduction in greenhouse gas emissions totalling more than one gigaton in 2030, setting the U.S. on course to reduce emissions by 50 to 52% below 2005 levels by the 2030.
Build Back Better: Breaking Down The Clean Energy Investment
The breakdown of the $555 billion worth of clean energy & climate-related investments included in the Build Back Better framework is as follows:
- Clean Energy Tax Credits: $320 billion.
- Resilience Investments: $105 billion.
- Clean Energy Technology, Manufacturing, and Supply Chain Investments & Incentives: $110 billion.
- Clean Energy Procurement: $20 billion.
Build Back Better: The Solar Industry Reaction
Following the passage of the bill through the House of Representatives, a number of figures in the solar industry offered their thoughts, encouraging the Senate to complete their negotiations and send the bill to President Biden for his signature. Abigail Ross Hopper, CEO of the Solar Energy Industries Association (SEIA), said:
“Decarbonising the electric grid will add close to one million Americans to the solar workforce by 2035, and after months of negotiation, we are on the verge of approving policy that will take a meaningful step toward tackling the climate crisis.”
Elsewhere, Gregory Wetstone, CEO of the American Council on Renewable Energy, called the House passage of the BBB Act a “critical milestone” and commented on the importance of stable, long-term investment in clean energy:
“The legislation finally moves the country beyond years of on-again, off-again renewable tax credits and establishes a stable, predictable and long-term clean energy tax platform that will spur critically important investment in renewable power, energy storage and advanced grid technologies.”
Interested in going solar? Talk to YSG today. YSG has been operating in the solar industry for over a decade now, working on everything from residential rooftop projects to large-scale solar farms. Whether you want to sign up for community solar, or lease your land for a solar farm, we will find the ideal solution for your specific needs. Call the office at 212.389.9215 or send us an email to learn how much you could save with solar.
YSG Solar is a project development company responsible for commoditizing energy infrastructure projects. We work with long-term owners and operators to provide clean energy assets with stable, predictable cash flows. YSG's market focus is distributed generation and utility-scale projects located within North America.
Sources:
https://www.whitehouse.gov/build-back-better/
https://www.pv-tech.org/bidens-build-back-better-plan-passes-house-as-senate-battle-looms/
Featured Photo by Adriano Ruiz on Unsplash.
