Like most of you I’ve been disappointed in Congress’s inability to provide humane relief for Americans struggling to get through the worst pandemic in our history. And while vaccines are around the corner, we know it will be several months before they get to everyone who needs it In the meantime, many communities lack access to healthcare and clean water, and face worsening challenges with energy and housing affordability. So, prioritizing our most vulnerable communities and these basic human needs is essential if and when Congress does move a COVID relief package.
But that is a pretty low bar ten months into an economic and public health crisis of this magnitude; we’ve got to do more. While Congress provided federal assistance to some industries early into crisis, they have completely ignored others, like the clean energy industry. Clean energy is pretty important because it’s is the key to solving our greatest ongoing threat as a species and it happened to be the biggest job creating sector in the economy pre-COVID.
Why does clean energy need relief?
Supply chain disruptions, shelter-in-place orders, siting and permitting delays have made 2020 a lost year for the clean energy sector. It was projected to add 175,000 jobs in 2020: heading into the new year, roughly 446,000 clean energy workers—13 percent of the sector’s pre-COVID workforce—are out of work.
Add to that the federal tax incentives that help level the playing field in the market with fossil fuels and drive clean energy deployment are phasing down or expiring, during the middle of this crisis. And the weak economy is reducing the value of tax equity, making project financing more difficult, so the industry is having a harder time using what is left of the tax credit tools Congress provided them. This all means less clean energy projects developed and completed, which means less jobs, and that’s bad news for the country and the climate.
Why didn’t the CARES Act help?
The Paycheck Protection Program that Congress created as part of the CARES Act early into the crisis did not help the clean energy sector much because it did not address the problem. Clean energy project financing is based on these tax incentives, so current and future projects are imperiled if they faze down or expire. Companies reduce payroll when future project development is uncertain or projected to decline, so a loan does not help if there is no project to come back to or more projects on the horizon.
What can Congress do?
Congress can provide urgently needed relief by preventing the phase down and phase out of these tax incentives. They can also make these tax incentives “refundable” to maximize usability, and update those tax incentives that are outdated.
These clean energy tax incentives enjoy bipartisan support, and they create jobs, improve public health, and save consumers money. They are also a baseline, low bar that we must meet if we are going to be serious about tackling climate change. We have essentially wasted the last four years without meaningfully addressing climate change at the federal level and we are very far behind the climate clock, which keeps ticking away, jeopardizing our economy and our future. This year we saw disastrous climate impacts collide with COVID ravaging our communities and complicating disaster response. Threats like these will continue to multiply the longer we take to reduce emissions and move towards clean energy.
We cannot afford to let one crisis exacerbate another. We can’t let our clean energy momentum stall out during the COVID crisis. Give the climate a fighting chance—don’t let Congress leave town without providing relief to the clean energy industry.