Solar Policy Priorities: What To Expect From Washington Post-Election

SI Staff
Written by Jessica Lillian
on November 08, 2012 No Comments
Categories : Policy Watch

11538_capitol Solar Policy Priorities: What To Expect From Washington Post-Election This week's Election Day, of course, resulted in the re-election of President Barack Obama, who has been described by industry leadership as a ‘powerful ally’ to the solar sector.

The U.S. House and Senate also gained several staunch solar supporters in their ranks, favorably tilting the political balance – even as party control remained the same in both chambers. Several members identified by the Solar Energy Industries Association (SEIA) as core solar champions, including Sens. Maria Cantwell, D-Wash., Dianne Feinstein, D-Calif., Debbie Stabenow, D-Mich., and Robert Menendez, D-N.J., won re-election.

‘For specifically solar-related outcomes, we couldn't have hoped for more in this election,’ said John Stanton, vice president of government affairs at SolarCity, during a webinar sponsored by law firm Chadbourne & Parke.

But when Obama, the House and Senate's solar supporters, and the rest of Congress return to work this month for a lame-duck session, many of the same political issues that have haunted the renewable energy industry will persist – especially if the same partisan gridlock that characterized Obama's first term carries over into the lame-duck session and into his second term.

Although solar professionals are not contending with an imminent tax credit expiration (as is the case in the wind industry), plenty of challenges await. The results of Election Day and current events are also expected to bring potential new opportunities for favorable legislation.

All in all, here are five vital post-election political issues to watch:

Looming fiscal cliff
With the threat of sequestration growing closer, Congress will make addressing the fiscal cliff a top priority.

‘There is a tremendous imperative from the business community to act on the fiscal cliff because of the enormous impact it's having,’ explained Jonathan Weisgall, vice president of legislative and regulatory affairs at MidAmerican Energy Holdings.

For the solar sector, the effects of Congress' attempts to back away from the cliff could be multi-faceted: First, if tax extenders are taken up as part of this work, a production tax credit extension – with or without a commence-construction provision – or other tax incentive changes could result, said Rhone Resch, president and CEO of the Solar Energy Industries Association, during a separate post-election webinar sponsored by SEIA.

Meanwhile, the fiscal cliff's dominance in Congress' work over the next couple months and beyond could also shut out discussion of any other issues, thus preventing energy bills or other pro-solar legislation from being considered.

Panelists at both webinars were uncertain whether Congress will immediately undertake dramatic action – including immediate tax reform – or put off any meaningful agreement.

‘What we'll see during the lame-duck session is some sort of down payment toward a grand bargain and an agreement to do tax reform in the near future,’ predicted Joseph Mikrut, a partner at Capitol Tax Partners.

Relief from anti-renewables rhetoric?
In recent years, some members of Congress and affiliated political action committees have unleashed increasingly aggressive attacks on renewable energy – particularly solar energy – as critics of the Obama administration's investments in the sector sought to paint such spending as wasteful and even politically corrupt.

Stanton remarked that the industry has seen a recent shift from many Republicans from espousing an ‘all of the above’Â energy strategy to ‘isolating and alienating’ the renewable energy portion of that strategy. However, such efforts largely failed to resonate with voters, as support for solar remained strong among voters of all political stripes.

Now that the election has ended, some newly elected members who actually support solar but were forced to hold back their views during the election may be able to safely come forward and help advance pro-solar legislation in Congress, Resch said.

Even so, the overall politicization of renewable energy may be slow to fade. The creation of such programs as a ‘green bank’ – within the realm of legislative possibility a few years ago – would now be unlikely following ‘all the Solyndra bashing and the House passage of the No More Solyndras Act,’ Stanton said.

Status of the investment tax credit
Although the investment tax credit (ITC), currently in place through 2016, could hypothetically face an early termination – possibly under tax reform passed by Congress as part of its fiscal-cliff attack plan – panelists on both the Chadbourne webinar and the SEIA webinar expressed confidence that the credit will remain safe.

Weisgall pointed out that history is on the ITC's side; no tax incentives in decades have seen termination before their sunset dates. Additionally, according to Resch, although some members of the House of Representatives may seek to eliminate a range of renewable energy tax incentives – including the ITC – the president and Senate will provide a legislative safety net against the actual passage of any such measures.

‘I am confident the ITC will be protected through 2016,’ he said.Â

However, the solar sector must accept that the ITC will eventually end – and must begin work now on a plan for coping with that reality. ‘It would be foolish for any technology receiving a credit not to plan for that,’ said Richard Glick, vice president of government affairs at Iberdrola Renewables. ‘We all know they're going to get phased out.’

Carbon tax?
Obama and his Republican challenger Mitt Romney did not discuss climate change during their election-season debates. But with recent natural disasters and the election of some environmentally minded new members of Congress, the issue of tackling climate change has gained new momentum lately – to the possible benefit of the solar sector.

‘We're really shifting to a whole new generation of pro-solar, pro-renewables senators who truly understand that climate change is a serious issue and that we are a solution technology,’ Resch noted.

With regard to the necessity of mechanisms for fighting climate change, Congress may have reached a ‘new level of reality,’ added Glick. This stance, he said, broadly strengthens the clean energy agenda.

Talk of a carbon tax, in particular, has increased, especially because budgetary pressures may lead lawmakers to look for new sources of revenue. Ultimately, however, the Chadbourne panelists pinned the chances of seeing such a measure passed at approximately 20% to 25%.

New leadership
Finally, solar advocates will need to learn some new faces at top posts in multiple branches of the federal government.

Sen. Ron Wyden, D-Ore., described by Resch as enthusiastic and energetic, will now chair the Senate's powerful Energy and Natural Resources Committee. Sen. Lisa Murkowski, R-Alaska, will remain ranking member. Sen. Max Baucus, D-Mont., will stay at it his post as chair of the Finance Committee, which will see an influx of new members from both parties.

In the House of Representatives, which remains controlled by Republicans, Democrats likely gained enough seats to sit on more key committees, Resch noted. This shift in political balance could have an effect on the development of solar-related legislation.

Obama's cabinet will also see a shake-up. In addition to the departure of Treasury Secretary Timothy Geithner, whose replacement has yet to be named, the president is also rumored to lose several cabinet members with integral roles in the solar sector: Energy Secretary Steven Chu, Interior Secretary Ken Salazar and Environmental Protection Agency Secretary Lisa Jackson may also depart, Resch reported.

Most solar professionals will not have the opportunity to interact with high-level cabinet replacements, but their local representatives can be more easily accessed.

‘We've had few dramatic changes, but the fact is that we have a lot of new legislators,’ said Carrie Cullen Hitt, vice president of state affairs at SEIA. Educating those lawmakers on the benefits and current cost status of solar energy will be an important task.

‘It is absolutely critical – whether or not you have a new legislator – that you and your team introduce yourself to them,’ Resch agreed. ‘Make sure they know they have a solar company in their district.’

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