House Ways and Means Committee Unveils Clean Energy Tax Credits
The House Ways and Means Committee has released their portion of the reconciliation for the Democrats' $3.5 trillion spending package. The plan follows through on many promises made by the Biden administration, including clean energy tax credits and credits for electric vehicle owners. The plan, announced on the heels of the Biden administration's solar roadmap, aims to raise climate ambition and empower clean energy infrastructure across the nation.
Why This Matters
The world is running out of time to meet the goals of the Paris Agreement and has failed to take advantage of the emissions dip caused by the COVID-19 pandemic. The fastest route to net-zero emissions is a complete switch to clean energy, a task that will take all of the country's infrastructure resources to complete. Despite roadmaps, pledges, and plans to revamp power grids and build sprawling infrastructure, boosting climate ambition from the private sector and the public will be critical to their success. Clean energy tax credits (CES) in particular, could be one of the most effective tools in the nations climate tool belt, and National Climate adviser Gina McCarthy has gone so far as to call them "non-negotiables."
Tax Return on Investment
All together the committee is proposing $235 billion in green energy tax credits. The bill will maximize the production tax credit rate for wind and solar power through 2031 and increase tax credits for clean energy facilities built in low-income communities. Also included:
- $2,500 in credits for energy-efficient single-family homes
- $7,500 for purchasing an electric vehicle, with an increased credit if that car was built in the US
The bill will also create a new tax credit for somewhat controversial renewable hydrogen, which some environmental groups have warned cannot be a solution to climate change if derived from fossil fuels.
"Our proposals allow us to both address our perilously changing climate and create new, good jobs, all while strengthening the economy and reinvigorating local communities," said committee Chairman Richard Neal (D-MA) "Taken together, these proposals expand opportunity for the American people and support our efforts to build a healthier, more prosperous future for the country."