United States

United States

US budget proposes $2bn for wind and solar tax credits

Joe Biden’s $6 trillion plan doubles BOEM funding and boosts spending on climate change and infrastructure, but details are scant

Joe Biden's $6 trillion budget is likely to meet with some opposition (pic: Official White House Photo by Adam Schultz)
Joe Biden's $6 trillion budget is likely to meet with some opposition (pic: Official White House Photo by Adam Schultz)

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President Joe Biden's proposed $6 trillion budget for the next fiscal year would provide just over $2 billion to "revise and extend" wind and solar production tax credits.

The tax credits have for years been the main subsidy for wind power development in the US but are expiring.

In December, Congress passed a one-year extension of the production tax credit (PTC) for onshore wind as part of a $2.3 trillion pandemic stimulus package, setting it at 60% of its original value for another year.

The budget overall calls for $36 billion for climate change, up $14 billion compared with the previous fiscal year.

A US president's budget is a wish-list. Only Congress can tax or appropriate. But since the PTC tends to have bipartisan support, it has a good chance of being extended.

Biden's budget, purposely released with little fanfare on 28 May — just before a holiday weekend — was reported as incorporating wholesale the president's $1.7 trillion infrastructure plan.

That infrastructure plan, for which Biden has so far failed to gain bipartisan support, includes $100 billion for the grid and clean energy, including extended clean-energy tax credits and a clean energy standard. The details have never been clear.

Biden's budget — for the fiscal year starting in October — only mentions a clean energy standard in passing, without giving specifics. It vaguely calls for a "energy efficiency and clean electricity standard that would transform the electric sector to be carbon-pollution free by 2035 while creating good-paying union jobs". No specific funding is suggested.

The budget does propose $45.8 million for the Bureau of Ocean Energy Management (BOEM), which oversees leasing and permitting of offshore energy projects including wind. That is nearly double the $28.5 million appropriated by Congress in the last fiscal year.

BOEM was underfunded during the four years of the Trump presidency.

The budget also broadly calls for $10 billion for clean energy innovation; $4 billion for advancing climate research; and $6.5 billion for rural clean energy storage and transmission projects.

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