Thanks to our partners at ACORE, there has been a lot of excellent work done in order to help pass Biden’s Build Back Better plan, which includes key legislation around renewable energy. Just this past week, this important package was passed the in the House of Representatives, and many hope to see it pass the Senate and head to the President’s desk for signature in the coming weeks. For a quick read on what is actually in this bill, please check out the following summary from ACORE regarding the Build Back Better bill, and which key elements they’re most excited about seeing addressed within it (directly below).
Highlights of the House Build Back Better Act Reconciliation Package
Reflecting a deal reached between the House Ways and Means and Senate Finance Committees, the bill includes five years of PTC and ITC extensions from 2022 through 2026, after which the Wyden tech-neutral clean energy production and investment credits will apply.
- The solar PTC is revived and extended through the first five years, after which broader credit optionality across qualifying technologies applies.
- There is a new ITC for energy storage through the end of 2026, followed by a comparable incentive for energy storage technologies in the Wyden regime.
- There is also a new ITC for regionally significant transmission lines that are placed in service before 2032.
“Full value” credits are defined as a 20% base credit, with an 80% bonus credit for compliance with prevailing wage and apprenticeship requirements. (For example, the ITC base credit would be 6%, with the remaining 24% available as a bonus credit for complying with prevailing wage and apprenticeship requirements). This bifurcated credit structure applies to the PTC and ITC, as well as the Wyden tech-neutral extensions.
- There is a 10% bonus credit for qualifying energy properties that meet the bill’s domestic content or energy community requirements.
- Additionally, there is a 10% bonus credit for solar, wind and battery storage projects that qualify for the Section 48 ITC and deploy in low-income communities. There is also a 20% bonus credit for deploying in qualifying low-income residential building projects or low-income economic benefit projects.
- There is a new clean hydrogen PTC whose value scales based on lifecycle greenhouse gas emissions reductions compared to steam-methane reforming. No credit is provided for facilities t
hat start construction after 2028.
- There is a 100% direct pay election for PTC and ITC technologies. (Note: the value of the direct pay election begins to phase down in 2024 and zeroes out completely in 2026 for projects not meeting specified domestic content requirements related to iron and steel, and manufactured products).
- The 25D residential solar credit is extended at full value through 2031, phasing down in 2032 and 2033. The definition of the 25D credit is expanded to include energy storage technology, and the 25D credit is made refundable starting in 2023.
- The 48C advanced energy property credit is revived, and new domestic manufacturing production credits are established for qualifying solar and wind components produced and sold before 2027, phasing down by 25% a year until the credits become unavailable for components sold in 2030 and beyond.
- An additional $30 billion for the DOE Loan Program Office to guarantee loans under the Section 1703 program.
- $2 billion for grants and loans for long-distance and offshore transmission lines, and for upgrading interties between interconnections.
- $800 million in technical assistance and economic development grants to facilitate the siting of interstate electricity transmission lines.
- $100 million for planning, modeling and analysis of a nationally connected grid, including a Macro Grid.
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For the direct text from the Build Back Better bill, feel free to check out the pdfs on the following link: https://budget.house.gov/build-back-better-act, and let us know in the comments what you think!