Biden Team wraps up expanded Clean Energy Credit Guidance
The Biden Administration released Tuesday guidance to assist companies in securing clean energy tax credits as part of the 2022 Inflation reduction Act. This program finalized a program that extends subsidies previously available for solar and wind to other low-carbon sources.
This move is a part of the actions taken by outgoing president Joe Biden to support his administration's efforts to combat climate change. The move could be vulnerable when President-elect Donald Trump assumes office in the coming weeks on a platform that emphasizes cutting spending and maximising fossil fuel production.
Trump said he would gut the IRA (Biden's signature climate legislation) to save hundreds of billions in the U.S. Budget. However, this would require the support of Congress.
U.S. officials announcing the guidance on Tuesday said that the IRA’s technology-neutral clean energy program offered as much as 30 percent tax credits for production or investments in climate-friendly electricity - a perk available for solar and wind power projects for many years.
The program also identifies other technologies that could be eligible. These include marine and hydrokinetic energies, nuclear fission, fusion and hydropower.
The program is crucial for decarbonizing the electricity sector, which accounts for around one-quarter of U.S. greenhouse gases, as well as expanding the capacity of the grid to meet the demand of datacenters, users of industrial equipment, and owners of electric vehicles.
Wally Adeyemo, Deputy Treasury Secretary, told reporters in a conference call that the repeal of subsidies could result in higher prices for electricity for consumers as it would slow down the pace of power projects while increasing costs for developers.
He said that removing the tax credits could have a significant negative impact, given the increased demand for electricity in the United States and that Americans are most concerned with rising costs.
According to an analysis by the Department of Energy, the credits along with the other provisions of the IRA and Bipartisan infrastructure law are expected to save U.S. consumers up to $38 billion in electricity bills between 2030.
In recent days, the Biden administration took other steps to consolidate its climate agenda. The measures include banning offshore drilling in new areas such as the Atlantic and Pacific, and completing guidance on how companies may obtain credits for green hydrogen produced by renewable energy, which is needed to decarbonize heavy industries and transport. Richard Valdmanis and Barbara Lewis edited the article.
(source: Reuters)
