© Stocksak. FILE PHOTO – A child runs as climate activists protest outside BlackRock headquarters, in San Francisco (California), U.S.A., October 29, 2021. REUTERS/Carlos Barria
By David Lawder & Nichola Groom
(Stocksak). – On Wednesday, the U.S. Treasury hosted a series of meetings with utilities, clean power groups, labor unions, and others to create detailed rules for $270 billion in newly-enacted incentives to jumpstart green energy investments.
Janet Yellen, U.S. Treasury secretary, met with 17 groups representing more 1,000 firms in clean energy supply chains, more than 2,000 utilities, and more Americans than 1 million workers, a Treasury official said.
The Treasury guidance will explain to companies how they can benefit from clean energy tax credits under the Inflation Reduction Act. Companies looking to invest in clean energy manufacturing, solar and wind power, and electric vehicles are encouraged to use the incentives.
The act extends 30% tax credit for wind, solar and other renewable energy sources and offers incentives for carbon capture as well as tax credits up to $7500 for zero-emission electric cars. It also contains new credits that will encourage production of components such solar panels or batteries in U.S. facilities.
Enphase Energy (NASDAQ.) Inc is a supplier of power inverters as well as batteries and other devices to solar installations. On Tuesday, the company said that it plans to start manufacturing products in the United States next. However, it gave few details, citing the need to provide tax credit guidance.
You must also pay the prevailing wage rates and offer apprenticeships. There are other benefits for those who locate facilities in areas that are not considered “brownfield”, or have high unemployment rates. These provisions will be defined by Treasury guidance.
Badrinarayanan Kothandaraman (Enphase Chief Executive) stated that “there are still many fine details to be ironed out.”
SPEED AND BALANCE NEEDED
Stocksak was informed by Lily Batchelder, Treasury Assistant Secretary for Tax Policy, that the series of at most six roundtable discussions is intended to gather input from stakeholders and quickly develop rules for unlocking economic benefits.
Batchelder stated, “But we also must ensure that guidance strikes the right balance” and added that Treasury staff were working “night and day to get the guidance out.”
Companies must move quickly, especially if they are considering investing in manufacturing. Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, will be participating in Wednesday’s Treasury roundtable.
Hopper stated to Stocksak that he couldn’t see a single company spending a lot of capital until there is clarity around the requirements to realize those credits.
The Treasury issued six notices asking for public comments on topics such tax credits for solar, wind and nuclear power, incentives for clean vehicles, and tax credits for energy-efficient houses.
Thursday’s meeting with Wally Adeyemo, Deputy Treasury Secretary, is scheduled for Thursday. He will be meeting with leaders of labor unions, climate advocacy groups and environmental organizations.