When fossil-fuel friendly President Donald Trump (R) took office in early 2017 and with both houses of Congress led by Republicans the renewable energy industry—wind, solar, tidal and other technologies—was set to brave a tempest. The industry has weathered multiple challenges from the federal government, including the unpopular tax bill—which could have gutted the industry had certain provisions remained and the so-called reliability review from Trump’s Energy Department.
Actually, considering all the renewable energy industry has faced this year it’s almost a surprise that despite everything the industry was challenged but remained relatively unscathed. In a recent post, “Been a Challenge in 2017, Energy Policy Has: Federal Year in Review, Star Wars Edition,” by Advanced Energy Economy’s (AEE’s) Dylan Reed and Maria Robinson show the dark forces behind some failed Death Star-type blows leveled at wind and solar power industries by the White House and Congress this year.
Both original versions of the hastily written, passed and signed in to law tax bill, for instance, had provisions that would have made it much harder for wind and solar power to compete with fossil fuels, by essentially removing renewable incentives and leaving incentives in place for fossil fuels. The House Bill would have gutted the production tax credit (PTC) for wind, and changing eligibility requirements for commencing construction under both the PTC and the investment tax credit (ITC). Meanwhile the Senate’s bill included the Base Erosion Anti-Abuse Tax (BEAT), which the renewables industry pointed out would amount to a new, 100 percent tax on renewable energy and not fossil fuels.
“Though the final conference committee bill avoided some of the worst features of the House- and Senate-passed bills, it was ultimately a missed opportunity to capitalize on advanced energy for the U.S. economy. The bill reduces the tax burden of businesses by lowering the corporate tax rate to 21% from the top rate of 35%. Market disruptions were avoided with no changes to the ITC or PTC, and the tax credit for electric vehicles was preserved,” Reed and Robinson wrote.
The BEAT provision was lessened, too. It now allows renewable energy credits to offset 80 percent of BEAT. “But the final impact still will likely have a negative impact on development in the short term,” Reed and Robinson observed.
When Perry directed his department to review electric grid reliability renewable energy advocates basically called it a witch hunt to show that wind and solar impacted the reliability of the electric grid compared to so-called “baseload” electric generators like coal and nuclear power. “When the final report was released, the focus was less on reliability than on ‘resiliency.’,” Reed and Robinson said. It also determined that renewable energy and natural gas weren’t negatively impacting the grid.
Perry again tried to give coal and nuclear an edge by proposing a rule that would power plants that maintain 90 days’ worth of on-site fuel to move to a cost-of-service rate, according to AEE. “Since only coal and nuclear plants could qualify, many in the industry viewed this as a direct bailout of plants that would otherwise retire due to being too expensive in the wholesale markets,” Reed and Robinson said.
The Federal Energy Regulatory Commission (FERC), which Trump overhauled leadership at more than once in 2017, said it needed more time to look at the issue. “While a change in administrations naturally leads to changes at appointed bodies, the turmoil at the usually staid Federal Energy Regulatory Commission (FERC) in 2017 was unusual, to say the least,” said Reed and Robinson.
Heading into 2018, the trade case that could impact solar power in the US the most, still awaits a decision from Donald Trump. Chinese-owned, US-based and bankrupt Suniva filed for relief from overseas competition. It was joined by SolarWorld Americas, whose parent filed for bankruptcy in its home country of Germany. “The Solar Energy Industries Association (SEIA) estimated that the tariffs originally requested by Suniva and SolarWorld would result in the loss of 88,000 U.S. jobs; and while the remedies recommended by the ITC are less stringent, the industry would still be affected,” Reed and Robinson stated.
Then there’s Trump’s decision to end Obama’s Clean Power Plan, and remove the US from the Paris Agreement on Climate Change—one of Trump’s most controversial moves in his first year. The Environmental Protection Agency, led by Scott Pruitt, proposed repealing the rule in October.
Despite all these efforts, however, renewable energy is still growing at near record paces. In the latest Solar Market Insight Report from SEIA and GTM Research, the organizations found that it was the 8th straight quarter that more than 2 gigawatts of new solar power was installed. Meanwhile the wind industry has installed nearly 3 gigawatts of new turbines throughout the year—and its biggest quarter is generally the final quarter of the year.Tweet