Saturday, February 10, 2018

Congress Extends Tax Breaks for Clean Energy — and Carbon Capture

Environment groups worry the carbon capture credits will just boost fossil fuels.  The 'tax extenders’, meanwhile, cut some nuclear, solar, and geothermal costs.

The compromise federal spending bill that Congress passed early Friday includes an array of tax credits for renewable energy, along with a controversial tax break for carbon-capturing technologies that will benefit the fossil fuel industries.

Known as  "tax extenders" because they expand or revive temporary benefits that had lapsed, these provisions will provide significant incentives for people and companies to invest in low-carbon forms of energy, ranging from residential installations of solar water heaters and geothermal heat pumps to nuclear power plants.

In some cases industry groups had lobbied for the provisions for years with little gain while Congress extended solar and wind tax credits during the Obama administration and enacted the Trump administration's recent broad tax break for corporate profits and personal incomes.

This time, the tax extenders made it into a package of spending provisions that will keep the government open for several weeks, while also guaranteeing large increases in military and domestic spending programs for two years, and raising the ceiling on the national debt.  The package, which had bipartisan support in the Senate and was endorsed by the White House, overcame opposition from liberal and conservative flanks in the House and settles, at least for now, the main fiscal debates facing Congress.

Some of the tax breaks, like one that restores a tax credit for home geothermal heating and cooling, which can cost tens of thousands of dollars to install, should make a significant difference to individuals trying to lower their carbon footprints.  The credit is 30 percent if the system is installed between 2017 and 2019, then drops to 26 percent in 2020 and 22 percent through 2021.

Others, like the carbon capture and sequestration provision, offer complicated and uncertain benefits to costly technologies that might or might not pay off—and that are hotly debated in environmental circles.

Some environmental groups say the carbon capture credits amount to a giveaway to polluters and actually encourage oil production.  Others say carbon capture and storage technologies represent a critical solution for reducing carbon dioxide levels in the atmosphere.

Breaks for Biodiesel, but Nothing for Batteries
The bill also offers tax breaks to people for expenditures they made last year, including for vehicles powered by fuel cells and electric motorbikes.

In addition the legislation extends tax credits to makers of biodiesel and "renewable diesel," and pushes back the deadline for nuclear facilities to qualify for credits.  The nuclear provision would benefit the only plant in the works, under construction by Southern Company, in Georgia.

But it disappointed some clean-energy advocates by omitting benefits for battery storage, a growing and crucial element of the expansion of wind and solar power.

Malcolm Woolf, senior vice president for policy at Advanced Energy Economy, a business coalition, said the legislation's tax credit extensions would support investments in companies that together have revenues of $200 billion a year and employ 3 million people.

Read more at Congress Extends Tax Breaks for Clean Energy — and Carbon Capture

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