By David Lawder and Nicola Groom
(Reuters) – The U.S. Treasury on Wednesday launched a series of meetings with clean energy groups, utilities, labor unions and others to develop detailed rules about $270 billion in newly created incentives to kickstart green energy investments.
US Treasury Secretary Janet Yellen met with 16 business groups representing more than 1,000 firms in the clean energy supply chain, more than 2,000 utilities and more than 1 million American workers, the department said.
The new guidance will tell companies how to take advantage of the Clean Energy Tax Credits in the Inflation Reduction Act. Incentives are important for companies looking to invest in solar and wind power, electric vehicles, clean energy generation and energy efficiency.
The law extends 30% tax credits for wind, solar and other renewable energy sources, and provides carbon capture incentives and tax credits of up to $7,500 for zero-emission electric vehicles. It also includes new credits to encourage the production of components such as solar panels or batteries in US factories.
Enphase Energy Inc, a supplier of power inverters, batteries and other solar installation equipment, said on Tuesday that it plans to start manufacturing products in the United States next year, but gave few details, explaining the need for tax credit guidance, especially in. Home content is needed to understand their full value.
Among those demands are paying prevailing wage rates and providing job training. Other benefits are available from locating facilities in “brownfield” areas – disused industrial areas – or those with high unemployment rates. Treasury guidance is expected to clarify the definitions of these provisions.
“There are still a lot of fine details that need to be ironed out,” Enphase Chief Executive Officer Badrinarayanan Kothandaraman said on the quarterly earnings call.
Yellen during the meeting “emphasized the Treasury’s commitment to working quickly to provide guidance so that investment can continue and our climate and our economy can realize the benefits of the law quickly,” said the Treasury in a statement.
SPEED, EQUITY WANTED
Treasury Assistant Secretary for Tax Policy Lily Batchelder told Reuters a series of at least six roundtable discussions aimed to address stakeholders’ concerns and develop guidance quickly.
“But we have to make sure the guidance is accurate and balanced,” Batchelder said, adding that Treasury staff are “working around the clock to get the guidance.”
Speed is among the top priorities for companies, especially those looking to invest in manufacturing, said Abigail Ross Hopper, president of the Solar Energy Industries Association, which will participate in Wednesday’s Treasury hearing.
I can’t imagine that one (firm) will spend a lot of money until they have clarity about the requirements to realize those credits,’ Hopper told Reuters in a September 20 interview.
The roundtable follows the release of six Treasury notices asking for public comment on topics such as wind tax credits, solar and nuclear power, incentives for energy-efficient homes and clean vehicle credits.
On Thursday, Deputy Treasury Secretary Wally Adeyemo is scheduled to meet with leaders from labor unions, climate advocacy groups, climate advocacy and environmental organizations.
(Reporting by David Lawder; Editing by David Gregorio and Josie Kao)