Parity for renewables is key to energy tax policy
Federal tax credits for wind must be restored
THE CLIMATE CRISIS is the most pressing issue of our time — and increasingly it’s an intractable one. Nowhere is this borne out more in Massachusetts than on Cape Cod, Martha’s Vineyard, and Nantucket. Ever worsening storms have led to rising sea levels and eroding shores, and temperature changes are affecting marine and terrestrial ecosystems — all are having a serious effect on the region’s vitality, economic and otherwise. Yet the Cape and Islands also have an opportunity to be part of the solution to reduce and ultimately eliminate carbon emissions through offshore wind.
The success of offshore wind is a critical component to our green future. One way to advance this important component is through tax policy. Clear-cut wins don’t come along every day in the realm of tax policy. When wins do emerge, it’s up to policymakers to ensure that those wins are protected, and that their benefits are sustained into the future. By any measure, the federal tax incentives for renewable energy technologies – especially wind and solar power – are a textbook example of such a clear-cut win.
Renewable tax incentives have helped reduce the cost of wind and solar energy by 70 percent in the last decade. As the economic incentives have improved, renewables have become the nation’s fastest-growing source of electricity. Today, renewables account for around 17 percent of all electricity consumed in the United States, and 14 percent in Massachusetts, fueling our economy with clean power that’s affordable and reliable.
To date, federal tax policies have worked to spur development of offshore wind. But instability at the federal level means that the status quo will not be enough to sustain and grow the benefits these tax policies have delivered to date.
Unfortunately, the level playing field that helped these two power sources mature is ending. Regrettably, the wind energy federal tax credit expired at the end of 2019, while the incentives available to solar continue.
The loss of parity between the wind and solar sectors would do much to suppress the growth already underway in the American wind sector — specifically in my backyard where we are slated to construct 800 megawatts of offshore wind in the waters south of Martha’s Vineyard and Nantucket. That’s bad for American manufacturing, a lost opportunity for economic vitality, and particularly dire for the environment.
For the US to achieve the steep carbon reduction goals needed to meet the moment, wind power needs continued tax incentives and greater policy certainty. Wind displaces more carbon emissions than any other renewable power source – including solar – and is expected to do so for the foreseeable future. On average, every megawatt hour of wind energy displaces the equivalent of 0.73 metric tons of CO2. At scale, that means that the electricity generated from wind energy avoided an estimated 201 million tons of emissions in 2018 – equivalent to 43 million cars.
A robust federal tax incentives package would help sustain those emissions reductions and provide a foundation for deeper cuts in emissions over the long-term. Those deeper cuts will not be attainable without a strong and growing wind sector.Federal energy policy has taken significant steps backward of late. The Trump administration’s retreat from greenhouse gas emissions requirements and fuel economy standards has had a chilling effect on investment in renewable energy. But by renewing and extending tax credits for the wind sector, Congress can provide positive support to American’s nascent wind industry and do much to help coastal communities like Cape Cod, Martha’s Vineyard, and Nantucket chart the way for a clean energy future in the face of the climate crisis.
Julian Cyr represents the Cape and Islands District in the Massachusetts Senate.