Building back better with clean energy tax credits

Thanks in part to advocates championing clean energy tax credits for more than a decade, this indispensable financial support has been the driving force behind the rise of renewable energy and advocates. Credits enacted in the 2000s allowed wind energy to triple and solar to grow by 52% annually. 

By making it more affordable for individuals and developers to pursue such new projects as rooftop solar or an offshore wind farm, clean energy tax credits help break down the barriers to going renewable. Under the new package, this incentive will only grow. In fact, the cost of rooftop solar will decrease by 30% thanks to this act, and the act shortens the payback for a solar project by about 5 years. This will open the door to more Americans making the decision to repower their lives with clean renewable energy right at home. 

All this will also lead to clearer skies and more breathable air. The credits are expected to spur enough renewable energy development to slash the county’s 2005 greenhouse gas emissions in half by 2030. Lowering these emissions are so important because they warm the planet and are linked to health problems like asthma, heart attacks and cancer. 

As they stand now, many of the clean energy tax credits will be phased out in the near future. The Build Back Better legislation is so important to the tax credit program because it grants these incentives a 10-year extension, which ensures financial support for renewable energy for years to come. This long-term certainty will ease planning for states, companies and consumers as they consider how and when to invest in clean energy. A 10-year extension will also be 10 to 30 times more effective at cutting emissions by 2031 than a five-year extension would have been, so keeping that timeline intact as the bill moves through the Senate will be key. 

The Build Back Better Act will also make the tax credits refundable, meaning that those who use the credits to pursue new renewable energy projects can receive the money in the form of a refund rather than as a tax credit. It’s a move that will expand renewable energy access to people and developers with lower tax income.