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Who Saved US Electric Vehicle, Solar Energy, & Wind Energy Tax Credits?

The United States Congress hasn’t yet passed a tax heist reform bill. However, word on the street is that it’s very close. Regarding clean energy tax credits and electric vehicle tax credits that were eliminated in previous versions of the bill, the rumors are that they are no longer going to be eliminated.

The United States Congress hasn’t yet passed a tax heist reform bill. However, word on the street is that it’s very close. Regarding clean energy tax credits and electric vehicle tax credits that were eliminated in previous versions of the bill, the rumors are that they are no longer going to be eliminated.

“House and Senate negotiators have agreed to spare the electric-vehicle tax credit and wind production tax credit in their compromise package, according to a Republican familiar with the process,” Bloomberg reported a couple of days ago. Considering how bill revisions go in general — but especially this smorgasbord of a mess, which has been dramatically hidden from the public and sprinted toward the doors — I wasn’t ready to count on anything until the deal is done and the ink is dry. However, there does seem to be a solid expectation that these cleantech tax credits will be retained.

Seconds ago, the US Solar Energy Industries Association (SEIA) put out the following statement, so I think it’s safe to presume those earlier rumors were correct:

Today, following aggressive advocacy efforts by the Solar Energy Industries Association (SEIA) to ensure the continued growth of the U.S. solar industry, Congress reached an agreement on comprehensive tax reform legislation. Following is a statement from Abigail Ross Hopper, SEIA’s president and CEO:

“After weeks of negotiations, the final tax legislation released today maintains the solar Investment Tax Credits (ITC) for both commercial developers and for homeowners in its current form. This is a great victory for the solar industry and its 260,000 American workers and we commend our bipartisan solar champions in Congress for their diligent efforts to maintain solar’s critical role in America’s economy.”

One question I now have is, who actually saved these tax credits?

Democrats have been completely blocked from the negotiations, as is evident by the “pay the rich and take from the middle class and poor further down the line” policies that Republicans are ramming through. Republicans in Congress aren’t even pretending to care about public dissatisfaction with the type of tax breaks and loopholes they are about to give to billionaires and multimillionaires. They are simply pushing through the wealth-shifting requests of the super rich people and corporations that fund their campaigns and allow them to stay in office. (Before you call me cynical, note that some Republican Congressmen admitted as much.)

So, was it really consumer pressure (and the lobbying work of superb cleantech advocacy arms like Plug In America, SEIA, and AWEA) that saved these tax credits? Perhaps the Republican senators and representatives were indeed scared of the wrath they might bring on themselves from unhappy constituents — after all, a lot of people are counting on tax credits for electric cars and rooftop solar. Perhaps these broad industry bodies somehow had some sway on Republicans policymakers.

However, I think it comes down to some other issues. Solar energy, wind energy, and electric vehicles have become big business in the United States (and elsewhere). Thousands of companies — big and small — benefit from these extremely fast growing industries. Some of these companies (and the organizations noted above) are raising significant awareness among the political class that they are creating jobs and economic benefits for their states and districts. In many cases, that may not be enough to get the vote of an anti-regulation, pollution-supporting Republican. However, in some states and districts, these industries are already a huge deal. To prematurely take away support is to attack some of the biggest employers and supporters in one’s jurisdiction.

In other words, the national industry associations and lobbyists may have significant sway, but it’s specifically because of the widespread, diverse, and locally influential cleantech companies that are now behind them. It’s primarily because many members of Congress know there are wind, solar, and EV companies in their jurisdictions creating jobs that would be slammed by a sudden policy change and would threaten these politicians’ own job security as a result.

Image via AWEA

Given how tight the vote on this tax bill is going to be and how easily individual Republican senators could hold out on a vote until they got precisely what they wanted, the choice was even too obvious and logical for Republicans to screw up. A couple of Republican senators unwilling to crush cleantech jobs in their states is all that was really needed to protect the tax credits — pollution industries couldn’t block a couple of senators outside of their power orbit from drawing a hard line on clean energy and EV tax credits.

From the Bloomberg coverage, here’s more on the somewhat soft but significant support from one Republican senator who wasn’t willing to let the wind tax credit get killed:

But that idea drew opposition from senators of both parties, most notably Iowa Republican Chuck Grassley.

“We’re in a transition period already, even if you don’t have a tax bill, on wind,” Grassley said this month. “Wind is in transition, so it shouldn’t be changed if we have a tax bill.”

Grassley is a senator of a leading wind energy state. As shortsighted and societally harmful as Grassley can be on various issues, he knows there’s a big red light in front of policies that would hurt his local wind industry.

Image via The Solar Foundation

You can expect that pressure was put on members of Congress from cleantech company lobbyists across the United States (representing companies like GE, First Solar, SunPower, Sunrun, Tesla, Berkshire Hathaway Energy, and many others). You can expect that the national industry associations did good work. You can expect that some Republicans are closet cleantech lovers. But when it comes down to it, I think it was influential companies and strong industries in a few specific “red states” that protected the cleantech tax credits. Look at the number of solar, wind, and EV jobs in states like Nevada, North Carolina, Florida, Texas, Arizona, and the Midwest. Some of the Republican senators in those states must care about those jobs.

It’s also a reminder as to why locating cleantech manufacturing facilities and other job-creating ventures in Republican areas can do a lot more good than might first be assumed.


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