Dive Brief:

• How House Republicans plan to pay for extensions of the 2017 Tax Cuts and Jobs Act got more complicated Monday, when 21 GOP representatives came out to publicly oppose wholesale repeals of the Inflation Reduction Act’s clean energy tax credits as part of the party’s upcoming reconciliation bill.
• The letter, dated March 9, is addressed to House Ways and Means Committee Chair Jason Smith and was first shared with Politico Monday. The members, led by Rep. Andrew Garbarino, R-N.Y., requested instead that any changes be done in a “targeted and pragmatic fashion.” 
• The number of signatories has increased since last summer, from the 18 House Republicans in the last Congress who publicly opposed a repeal of the credits. Republicans have majorities in the House and Senate, but the party’s House majority is slim.

Dive Insight:

The letter comes about a month after clean energy stakeholders descended on Capitol Hill to directly lobby with and ask Congress members to maintain the renewable energy tax credits contained in the IRA. President Donald Trump also signed a day one executive order pausing disbursements related to the IRA and some programs in the Bipartisan Infrastructure Law, which has led to confusion and prompted project pauses across the industry, according to clean energy executives.

The Inflation Reduction Act contained more than $369 billion in clean energy incentives, as well as a transferability mechanism that unlocked new financing options for corporations and developers. Garbarino and the other lawmakers wrote that they wanted to emphasize to Smith “the importance of prioritizing energy affordability for American families and keeping on our current path to energy dominance amid efforts to repeal or reform current energy tax credits.”

“Countless American companies are utilizing sector-wide energy tax credits — many of which have enjoyed broad support in Congress — to make major investments in domestic energy production and infrastructure for traditional and renewable energy sources alike,” the letter said. “Both our constituencies and the energy industry alike remain concerned about disruptive changes to our nation’s energy tax structure.”

In addition to Garbarino, Republican representatives from Arizona, California, Colorado, Georgia, Indiana, Iowa, Michigan, Nebraska, Nevada, New Jersey, New York, Ohio, Pennsylvania, Virginia and Washington signed on to the letter. The representatives said that the credits were passed on a 10-year timeline, and energy developers have been planning with the clean energy incentives in mind. As such, “premature credit phase outs” or restrictions on things like credit transferability would endanger the capital allocations, planning and commitments that have been done based on those credits.

“As energy demand continues to skyrocket, any modifications that inhibit our ability to deploy new energy production risk sparking an energy crisis in our country, resulting in drastically higher power bills for American families,” the GOP lawmakers said. “This is especially true for energy credits with direct passthrough benefit to ratepayers, where such repeals would increase utility bills the very next day.”

The public letter showcases an understanding by the signatories that repealing the IRA’s clean energy tax credits “would immediately raise costs for Americans nationwide,” Clean Energy for America President Andrew Reagan said in emailed comments to ESG Dive Monday. The organization is a 501(c)4 network that advocates for boosting the clean energy economy and accelerating the energy transition.

“Across America, energy tax credits have transformed local economies — creating thousands of jobs, lowering energy costs, revitalizing American manufacturing, and securing America’s energy dominance,” Reagan said. “Protecting these investments isn’t a partisan issue — they benefit both Republican and Democratic districts.”

Renewable energy developer and operator NXTGEN Clean Energy Solutions CEO Russ Bates was among the industry stakeholders who lobbied Congress. He said on a call organized by Clean Energy for America last month that the main pushback he received in meetings with House and Senate Republican leaders was that Congress will have to find cuts to pay for extensions of the tax cuts from the first Trump administration.

However, until the renewable energy industry gets more clarity on the future tax environment, “a lot” of projects “in various stages of development” have paused, according to Bates.