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What Does Biden’s Infrastructure Plan Mean for the Solar Sector & Consumers?

The Biden administration’s new jobs, infrastructure, and climate plan was unveiled on March 31st, 2021. Titled the American Jobs Plan, it will have wide-ranging impacts on the economy and notably the clean energy sector. The White House calls this “the moment to reimagine and rebuild a new economy,” and their ambitious investment package just might live up to the hype.

What should solar consumers and those who work in the solar industry take away from the plan?

New Standards for Utilities & Energy Companies

In what the Washington Post calls the “linchpin” of the American Jobs Plan, the package creates a new “national standard requiring utilities to use a specific amount of solar, wind and other renewable energy to power American homes, businesses and factories.” This is the most wide-ranging federal directive to the energy sector in decades, setting a new standard for all states (including the 20 which don’t currently have any renewable energy mandate for utilities) to increase their proportion of renewable energy use over the next 15 years. The move will significantly cut into the usage of gas, coal, and oil in energy production, helping the nation meet its climate goals.

In addition to the renewable energy mandate, energy companies will be required to address the “hundreds of thousands of former orphan oil and gas wells and abandoned mines (that) pose serious safety hazards, while also causing ongoing air, water, and other environmental damage.” As Solar Power World reports, this will create hundreds of thousands of union jobs for workers in underserved communities through an up-front investment of $16 billion. The plan also aims to aid distressed communities through investment in building next-generation (including clean energy) industries that will provide jobs and economic investment.

Investments in the Electric Grid

Our nation’s electric grid, which has been sorely neglected in recent years and is the target of urgent calls for grid modernization, is a vital part of the movement towards clean energy distribution. The American Jobs Plan calls for investment in building a grid that can deliver cleaner, cheaper energy to the places where it is most needed. It includes “the creation of a targeted investment tax credit that incentivizes the buildout of at least 20 GW of high-voltage capacity power lines and mobilizes tens of billions in private capital off the sidelines — right away.” It also establishes the Grid Deployment Authority at the Department of Energy, which will focus on creating jobs and utilizing American-made materials in the effort to create additional high-voltage transmission lines.

Tax Credits for Consumers

Solar energy’s primary inclusion in the American Jobs Act comes “in the form of a proposed 10-year extension and phase down of an expanded direct-pay investment tax credit and production tax credit for clean energy generation and storage,” PV Magazine reports. This is great news for the energy storage community and consumers, as it extends the current investment tax credit of 26% for residential, commercial, and large-scale utility storage installations. Energy storage is an increasingly vital piece of the solar energy puzzle, as it allows for greater energy security as well as enabling greater net-metering benefits.

The plan also includes a $174 billion investment in electric vehicles. It affirms Biden’s earlier commitment to transition the federal vehicle fleet to EVs and also commits to build a nationwide network of 500,000 vehicle charging stations within the decade. EV consumers will benefit from “point of sale rebates and tax incentives to buy American-made EVs that are affordable and manufactured in the U.S.”

A Reimagined Economy

While these specifics are all good news for the solar sector and solar consumers, the broad thrust of the bill is to transition further away from harmful fossil fuels and towards an economy that prizes renewable energy and innovation. To that end, it “seeks to create a net-zero emissions economy by mid-century,” and “includes $15 billion in climate research and development projects, including utility-scale energy storage,” according to EnergyDive. All considered, it is a substantial step forward for all those who value renewable energy, the protection of our climate, and the creation of clean energy jobs.

Solar Design Studio is heartened by the administration’s push towards renewable energy and the increase in public discourse surrounding it and grid modernization. Our commitment to providing the highest quality solar project design and execution with the greatest return on investment is bolstered by the inclusion of tax credits and incentives for solar consumers. To learn more about how we can assist with your solar needs, contact us today!

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