Feb 23, 2021 | Trends, Sustainability

Covid Relief Bill Advances Energy Initiatives

The Covid Relief Bill that was approved by Congress in December includes about $35.2 billion in energy initiatives. The Energy Act of 2020 authorizes RD&D activities and programs to advance new technologies. Photovoltaics, new transportation technologies and energy-efficiency technologies received a significant portion of the stimulus.

Solar technologies such as solar modules, concentrating solar technology, new photovoltaic technologies and initiatives to expand solar manufacturing and recycling technologies were designated $1.5 billion dollars.  Transportation tech initiatives were budgeted $2.6 billion. Building on the success of weatherization and energy-efficiency programs, $1.7 billion will be poured into the reauthorization of the Weatherization Assistance Program.

Success of Stimulus Packages in the Past

The American Recovery and Reinvestment Act of 2009 was a stimulus package enacted in response to the Great Recession.  Funding from this bill was used in building five large-scale solar energy facilities in the U.S. These facilities are part of the growing solar industry that provides approximately 250,000 jobs and produced over 18,000 MW of electricity in 2020. This act represents how a stimulus bill, such as the one Congress just passed, can support and drive the energy industry.

The new package extends federal tax credit programs that incentivize wind and solar power plant construction, carbon capture inclusion, biofuels and alternative fuels, and fuel cells. Support is designated for the commercialization of technologies that are not yet marketable but demonstrate viability and scalability.

Energy Tax Credits

By extending renewable energy tax credit programs, many of the effects of the COVID-19 pandemic shutdowns such as disrupted supply chain, permitting delays and labor disruptions will be mitigated. Allowing extra time to qualify for the tax incentives will spur more investment in renewable energy projects.  The tax deduction for energy-efficiency improvements in commercial buildings set to expire will become permanent under the new law but will have a cap of $1.80 per square foot.

Congress has shown support of offshore wind farms by extending the construction start deadlines of projects and allowing them the choice of either Incentive Tax Credits or Production Tax Credits for projects. Since offshore wind farms are more expensive than land farms and require more design and permitting, the extension makes investment a more viable option.

Hydroflourocarbon (HFC) Reduction

The HFC measure allows the EPA to cut HFCs production and use by 85 per cent in the next 15 years. This can impact global warming by as much as a half degree. This rule lays the groundwork for the United States to join one hundred nations in signing the Kigali Amendment, an international agreement to replace HFCs with refrigerants that have less negative impact on the climate.

There are more measures included that show that, with this bill, the United States is committed to advancing the technology needed for decarbonization. The Energy Act of 2020 aims to reduce future greenhouse gas emissions nationwide, bring jobs back to the USA and encourage export of energy efficiency technologies. The legislation also includes language that declares that the Energy Department must prioritize funding for research to power the United States with one hundred percent clean energy. Many benefits trickle down to the building energy management level. To find out how your project can benefit from the Covid Relief Stimulus, contact the experts at Albireo for a comprehensive consultation.

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