Wind and solar businesses get five-year extension of federal tax credits

The $1.1 trillion government spending bill passed Friday by the U.S. House of Representatives includes an extension of wind and solar energy tax credits by five years — the longest amount of time that these credits have ever been allotted. Many business owners and environmental energy advocates say the move will provide much-needed stability to the clean-energy industry in the United States, but some groups say it falls far too short and comes at a heavy cost.

“We know what tomorrow looks like,” said Yuri Horwitz, CEO of Sol Systems, a company that invests in solar projects. “Not just the next year, but the next five years. And that’s really, really important. Volatility is challenging for any industry, especially one that is nascent and still growing.”

Lisa Daniels, executive director of Windustry, a nonprofit organization that advocates for wind energy and other sustainable sources of energy, said the proposed wind credits will give businesses more time to complete their projects, rather than racing to finish before the existing tax credit expires on Dec. 31, 2016. “It allows people to take a breather,” Daniels said. “It means that people don’t have to race against the clock for every minute that they’re trying to get these projects in the ground.”

While the solar and wind energy industries have grown over the last several years, they only account for a small percentage of America’s energy consumption. According to the U.S. Energy Information Administration, renewable energy made up 10 percent of total U.S. energy consumption as of 2014. Of that 10 percent, solar energy accounted for 4 percent, and wind energy accounted for 18 percent. By comparison, petroleum accounts for 35 percent of total U.S. energy consumption.

Bob Keefe, executive director of Environmental Entrepreneurs, a trade association for renewable energy companies, said the wind and solar credits would help the industry compete against oil.

“When you have an entrenched industry that’s been getting subsidies for more than a century, like the petroleum industry and the fossil fuel industry, you need to level that playing field,” Keefe said. “And that’s what this does.”

According to Oil Change International, a clean energy advocacy group, the U.S. fossil fuel subsidies range from $10 billion to $52 billion annually.

Media outlets including The Washington Post and The New York Times recently reported that that the wind and solar credits in the spending bill were a concession to Democrats in exchange for their support for lifting a 40-year ban on exporting U.S. crude oil — something Republicans had pushed for.

But not everyone is happy with this apparent horse-trading.

“Ultimately what we had in the eyes of a lot of people is a not particularly good deal where a permanent advantage is given to big oil, and a temporary lifeline is given to renewable energy,” said Lukas Ross, climate and energy campaigner at Friends of the Earth, an environmental advocacy group. “We can’t set a precedent where the budget process becomes an opportunity to extract major environmental concessions.”