In a June 2, 2020 letter to the House and Senate leadership, a group of fifty-six Democratic senators and representatives (and one independent senator) voiced strong support for an extension of renewables tax credits due to COVID-19 related disruptions to the clean energy industry, stating that “a number of the existing clean energy tax incentives for individuals and business are phasing down or expiring” and that “[e]xtending and providing additional flexibility for these credits, which spur production and save money for consumers, is another important facet of a quick recovery.” The letter, which is signed inter alia by Senators Elizabeth Warren (D-MA), Amy Klobuchar (D-MN), Bernard Sanders (D-VT), and Kamala Harris (D-CA), also emphasizes the necessity for “robust investments . . . to spur growth in renewable energy, energy storage, energy efficiency, clean vehicles, clean and efficient infrastructure, clean fuels, and workforce development.”
After the initial rounds of COVID-19 economic relief legislation passed renewables tax credits by, this letter is possibly the most encouraging sign in recent weeks that Democratic lawmakers are committed to including extensions of the investment tax credit (“ITC”) and production tax credit (“PTC”) in future COVID-19 related relief efforts. The wind PTC in section 45 of the Code, after a one-year 60% extension granted in December 2019, is slated to expire for projects that begin construction after December 31, 2020; the solar ITC in section 48 of the Code has already begun to phase down (from 30% of eligible basis to 26%) for projects beginning construction in 2020 and is scheduled to revert to 10% by 2022. Moreover, the letter’s reference to “additional flexibility” for credits may hint at the prospect of additional relief beyond mere extension, including a refundability regime.