For the first time, investors looking to pour money into US clean energy projects can count on generous government subsidies for at least a decade, giving them long-sought confidence in the staying power of the world’s third-largest renewable energy company.
tax credits for wind and solar projects have supported explosive growth in the US.installations in the last decade. But they often had short time horizons, leading project developers to scramble to meet looming deadlines and turning off risk-averse investors.
Long-term tax credits for wind and solar power, included in a $430 billion bill passed by the US Senate on Sunday, have been supplemented by new credits for energy storage, biogas and hydrogen. Wind and solar project developers can also get more support if they use the US.-Teams formed or built their projects in poorer areas.
“It’s going to be at least a golden 10-year period,” said Keith Martin, an attorney for Norton Rose Fulbright who works on financing renewable energy projects. “That’s a long way for people to plan and really accelerate this clean energy transition.”
The House of Representatives is expected to pass the anti-inflation bill soon, and President Joe Biden should sign it into law soon after.
Shares in renewable energy companies have soared since Senate Democrats announced a deal to pass the bill on July 27. WilderHill’s clean energy rating increased 15% during that time. The index includes US market participants such as solar panel maker First Solar, residential solar company SunPower Corp, renewable energy company Brookfield Renewable and battery storage company Fluence Energy, among others.Wind and solar power accounted for just 12% of US electricity generation last year. But decarbonizing the country’s electricity sector by 2035, as pledged by the Biden administration, will require much more.
According to the International Energy Agency, renewable energy investment in the United States will reach $215 billion in 2021, trailing only China and Europe. Investors, project developers, bankers and lawyers said the anti-inflation law would fundamentally change demand from a wide range of investors.
