ITC extension may be stalled in the U.S. House

It has long been know that the fate of the most important federal policy for the U.S. solar market could depend upon political factors outside of the solar industry.

That appears to be true on Thursday afternoon, as a spending bill which contains a provision for extension of the Investment Tax Credit (ITC) for five years with a three-year phase-out appears to be stalled in the lower house of the U.S. Congress.

This is despite a carefully crafted compromise by leaders of both parties, who exchanged a lifting of the oil export ban for extensions of both the ITC and the Production Tax Credit (PTC), a key support for the wind industry.

The problems are myriad. According to The Hill, the right-wing of the majority Republican Party is expected to oppose the bill due to its price tag and the absence of anti-terror provisions.

Obama’s Democratic Party, which holds a minority in the House of Representatives, is also split. The chair of the Congressional Black Caucus, which represents 10% of total House membership, has called the budget deal “inadequate” in terms of support for black communities, and complained this his caucus was not involved in the negotiations.

Another problem is that environmental groups are split on the deal, with some opposing the deal due to the lifting of the oil export ban. This is despite House Minority Leader Nancy Pelosi and others noting that the greenhouse gas benefits of expanded clean energy far outweigh damage from oil exports.

Sierra Club has delivered a nuanced statement that condemns lifting the ban but says that Democrats extracted a “high price” by extensions of the ITC and PTC. Meanwhile, Center for Biological Diversity (CBD) called on the House to oppose the deal.

CBD has played a central role in opposing large solar projects in the California desert, including hiring scientist Dr. K. Shawn Smallwood, famous for his very high estimates of bird fatalities from wind turbines and solar projects, based on his own method of projecting fatalities.

Solar installer Sunrun says that it cannot evaluate the oil export ban, but notes that the deal is critical for the solar industry. “Long-term extensions are the most important thing for getting clean energy to scale,” Lauren Randall, Manager of Public Policy at Sunrun told pv magazine. “We’re not experts on the oil deal.”