Under current law, 30% of the solar investment tax credit will gradually decrease from next year and then disappear completely in 2022, permanently reducing the resident business user's 10% tax credit for commercial operations.
House of Representatives Fundraising Committee Chairman Richard Neil (D-Mass.) will develop tax legislation in the coming weeks to stimulate greater investment in clean energy and build stronger incentives to reduce greenhouse gas emissions. . If the United States releases large-scale new investments, especially in the case of utility-scale solar energy, the legislation should extend the existing 30% investment tax credit for domestic and commercial solar energy to the future.
The rules of the Public Utilities Management Policy Act (PURPA) of 1978 ultimately required many states to enter into long-term contracts with solar developers at prices well above current levels, locking in expensive electricity, and including a “must take” rule. These countries are required to provide resources for the permanent distribution of electricity.
The excess consumer cost of this anachronistic regulation is considerable. Uck, a utility company, says only North Carolina customers will pay more than $1 billion in market costs over the next decade. Western utility company PacifiCorp found that in the next 10 years, mandatory contracts under PURPA will increase the consumer price of market prices by $1.2 billion. A new analysis by Concentric Energy Advisors found that only solar contracts between 2013 and 2019 exceeded the market cost of PURPA mandatory contracts, totaling $1.87 billion. All of these costs are simply passed on to consumers who pay solar prices for these projects far above market prices, rather than the current low solar prices (according to Lazard, this is more than a decade ago. The scale of PV solar energy is 89% lower). Most countries.
In response to this consumer issue, this fall, the Federal Energy Regulatory Commission (FERC) issued a proposed rulemaking notice to make states more flexible in setting energy rates based on electricity sales contracts for eligible facilities. Proponents say the change is intended to help consumers reduce costs by benefiting from the sharp drop in solar prices in recent years, rather than requiring states to participate and sign long-term contracts at prices well above current lower market prices.
FERC Chairman Neil Chatterjee and Republican-appointed Commissioner Bernard McNahm support the change. FERC Commissioner Richard Glick (Democrat) agrees to some extent, but disagrees to some extent, but allows states to be more flexible in setting up for qualified solar developers. The contract price did not indicate an objection. Instead, he said he believes Congress should address these issues, but the prospects seem slim.
The risks advocated by solar advocates against consumer reforms in the proposed FERC rules are obvious – they seem to be fighting alongside a few solar developers who make huge profits through contracts above market prices, rather than ordinary solar energy. client. The price paid is higher than the market price. At least for the solar industry, which advocates expanding the more important solar ITC regulations, this seems to be short-sighted. Of course, the PURPA project can hardly provide the economic or climatic advantages of solar ITC, but for many consumers, they can damage the reputation of solar energy.
In addition, states such as New York and Illinois are now rationally allowing nuclear power and other zero-emission sources to meet clean energy standards, so that overcapacity in renewable energy will not ultimately lead to congestion and idleness of other low-carbon sources, increasing consumer costs. The alternate base load power supply.
In the past decade alone, the overall solar price in the United States has fallen by more than 70%, which is a huge benefit for American consumers, work and climate protection. Americans should be proud of these advances and should encourage Congress to expand its strong solar investment tax incentives to ensure more clean solar power.
However, getting rid of outdated solar subsidies is also necessary, because outdated solar subsidies cost consumers in many states billions of dollars more than current prices and damage the reputation of solar energy. In this way, consumers can know that the government has the greatest interest in providing low-cost, zero-emission solar energy.
Paul Bledsoe is a strategic advisor to the Institute for Progress Policy and a lecturer at the Center for Environmental Policy at the American University. He served in the White House Climate Change Working Group under President Clinton.
