Democrats draft legislation to expand renewable energy tax credits

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Democrats on the tax-writing House Ways and Means Committee introduced a package of draft legislation to deal with climate change by offering further tax incentives for use of renewable energy.

The Growing Renewable Energy and Efficiency Now, or GREEN, Act would promote the use of green energy technologies and incentivize the reduction of greenhouse gas emissions through new and existing tax benefits. It aims to increase energy efficiency and green energy use in both residential and commercial buildings, support the use of zero-emission transportation and supporting infrastructure, invest in a green workforce through energy credits for manufacturers, and tax credits for research and academic programs on environmental justice. The legislation would also require the Treasury Department to analyze the feasibility of a price on greenhouse gas emissions, using the EPA’s Greenhouse Gas Reporting Program.

The GREEN Act includes several bills for providing tax credits for renewable energy and reducing greenhouse gases:

  • The Renewable Energy Investment Act would allow taxpayers to be treated as having made an overpayment of tax equivalent to 85 percent of the value of the credit they would otherwise be eligible for under the Section 48 investment tax credit or the Section 45 production tax credit.
  • The Empowering Homeowners Energy Efficiency Act would enable individuals to claim a credit of up to 30 percent of the cost of a home energy audit under Section 25C, up to a maximum credit of $150.
  • The Innovative Energy Manufacturing Act would revive the Section 48C qualified advanced energy property credit for investments in manufacturing facilities for clean energy technologies. It would allocate an additional $2.5 billion to be awarded each year from 2020-2024.
  • The Creating Opportunities in Research for Environmental Justice Act, or CORE Justice Act, would create a tax credit of $1 billion for each year from 2020-2024 to institutions of higher education for environmental justice programs.

“Estimates say that climate change will cost Americans more than $500 billion each year by the end of this century. We cannot afford to wait any longer to address this existential threat,” said the chairman of the House Ways and Means Subcommittee on Select Revenue Measures, Mike Thompson, D-Calif., in a statement Tuesday. “This bill will build on existing tax incentives that promote renewable energy and increase efficiency and create new models for technology and activity to reduce our carbon footprint. I’ve long said that if we don’t address climate change, nothing else matters as we won’t have a planet to pass on to our next generation. The GREEN Act is a critical step forward in our fight to tackle climate change head on.”

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Finance, investment and tax-related legislation Tax credits Energy industry CSR reporting ESG