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Leon Kaye headshot

NRDC Makes the Case for Federal Clean Energy Tax Credits

By Leon Kaye

As U.S. President Donald Trump seeks to dismantle the energy and environmental policies implemented by his predecessor, one NGO is reminding the White House and Congress that the extension of federal renewable energy tax credits is an economic multiplier.

In a report issued this week, the Natural Resources Defense Council (NRDC) suggested that those credits will result in more than 220,000 jobs and contribute $23 billion to the U.S. economy this year alone. The outcome is not only an improvement in air quality across the country, but also lower utility bills and less risk that consumers will be exposed to volatile energy prices, the NGO concluded.

As it stands now, 2015 legislation passed by Congress will provide tax credits for onshore wind projects until 2019. For solar power, residential tax credits will be eliminated after 2021; utility- and commercial-scale projects will be capped at 10 percent of investment costs after that same year.

Many clean-energy advocates, including staff at the Union for Concerned Scientists, have argued that these long-term programs help boost U.S. manufacturing capacity, create certainty in the markets and reduce emissions. In previous years, the annual renewal of federal tax credits for wind and solar power often lapsed or were reinstated during last-minute budget talks, hampering the sector’s growth.

NRDC’s analysis pointed to the gains in states where, at a first glance, renewables would not have much of a presence.

Wind and solar tax credits will help create 9,700 jobs this year and 10,000 jobs next year in Ohio, increasing the state’s GDP will increase another $1 billion, the NRDC concluded. The Buckeye State’s neighbor, Pennsylvania, will see a similar benefit in both additional jobs and a boost in state GDP.

But economic benefits are not solely limited to a state's energy sector: NRDC’s research suggests that Iowa’s growing wind power industry will result in more construction jobs, Michigan could see an increase in manufacturing jobs due to new wind installations.

“Good tax policies to boost wind and solar projects are creating new jobs, growing our economy, and providing climate and public health benefits,” Kevin Steinberger, an NRDC policy analyst, said in a statement. “This analysis makes a clear and compelling case to build on this progress to achieve even stronger, more persistent job gains and economic growth.”

The NRDC report incorporates data from multiple studies that project solar and wind power capacity in the U.S. to double by 2021 from 2015 levels.

In comparing future renewables growth in a scenario that included tax credits versus one with none, NRDC concluded that the difference would be an additional 29,000 megawatts of clean power. That 23 percent boost in capacity could be enough to electrify almost 8 million homes.

Critics of the clean-energy sector often say its growth is only possible because of generous tax credits and subsidies – even though improvements in efficiencies have resulted in the costs of these technologies to drop precipitously in recent years.

It's true. The federal government does spend money on clean power subsidies and incentives -- a total of $11.3 billion In 2013, according to the U.S. Energy Information Agency. But the research organization Oil Change International estimates that the federal government spent $37.5 billion annually on price supports for the fossil fuel industry in 2014, including $21 billion on exploration and production subsidies.

And in fact, those numbers increased during the Barack Obama administration, due to Obama’s oft-maligned “All of the Above” energy strategy that irritated critics on both the left and right.

Image credit: Pexels

Leon Kaye headshot

Leon Kaye has written for 3p since 2010 and become executive editor in 2018. His previous work includes writing for the Guardian as well as other online and print publications. In addition, he's worked in sales executive roles within technology and financial research companies, as well as for a public relations firm, for which he consulted with one of the globe’s leading sustainability initiatives. Currently living in Central California, he’s traveled to 70-plus countries and has lived and worked in South Korea, the United Arab Emirates and Uruguay.

Leon’s an alum of Fresno State, the University of Maryland, Baltimore County and the University of Southern California's Marshall Business School. He enjoys traveling abroad as well as exploring California’s Central Coast and the Sierra Nevadas.

Read more stories by Leon Kaye