Energy-efficiency industry group presses for tax credits

Existing tax credits aren't big enough to motivate consumers to install clean and efficient energy systems, the industry says

SAN FRANCISCO, CA - MAY 09:  Luminalt solar installers Pam Quan moves a solar panel during an istallation on the roof of a home on May 9, 2018 in San Francisco, California. The California Energy Commission is set to vote on proposed legislation that would require all new homes in the state of A technician installing solar panels in San Francisco. (.Justin Sullivan/Getty Images)
SAN FRANCISCO, CA - MAY 09: Luminalt solar installers Pam Quan moves a solar panel during an istallation on the roof of a home on May 9, 2018 in San Francisco, California. The California Energy Commission is set to vote on proposed legislation that would require all new homes in the state of A technician installing solar panels in San Francisco. (.Justin Sullivan/Getty Images)
Posted June 4, 2020 at 5:00am

Congress should expand tax credits for energy efficiency projects to “help speed the recovery” in the industry, which the coronavirus pandemic and looming recession have hit hard, hundreds of heating, cooling, insulation and energy companies said Thursday.

In a letter to Republican and Democratic leaders, nearly 800 companies called for Congress to expand a credit people can use to make energy-efficient improvements to their homes by raising it for the next two years to $2,400 from $500 and doubling the percentage of expenses that the credit would cover.

Authors of the letter, which the nonpartisan advocacy group Alliance to Save Energy organized, said the so-called 25C credit is insufficient to prompt homeowners to make upgrades. 

They also said boosting the credit could help bring back jobs lost in the pandemic.

[Renewable energy projects get a pandemic break from IRS]

“Our experience working with customers shows that the current 25C credit of $500 is not enough to spur homeowner investment at a level that would put hundreds of thousands of Americans who have lost their jobs back to work,” the letter says.

Lost jobs

The pandemic and stay-at-home orders that followed decimated the U.S. clean energy industry, pushing roughly 600,000 people into unemployment since March, according to a tally from E2, an industry trade group. 

More than 413,000 of those layoffs were among energy-efficiency workers, who, as technicians and mechanical experts, need to enter buildings and install new doors, windows, insulation, and heating and cooling systems. Social distancing requirements have made that task often impossible.

“We know that there is a real need to improve the efficiency of homes throughout America, and expanding this incentive pays all sorts of returns — lower utility bills, benefits to the environment, and now putting people back to work,” Dale Benander, Safety Manager of ABS Southeast in Worcester, Mass., said in a statement.

The request from Benander and his colleagues is more ambitious than the House and Senate bills Reps. Jimmy Gomez, D-Calif., and Mike Kelly, R-Pa., and Sens. Susan Collins, R-Maine, and Maggie Hassan, D-N.H., introduced in October.

Their legislation would raise the credit to $1,200 for homeowners.

The energy-efficiency industry, a large portion of the broader clean energy industry, is on track to lose 600,000 jobs by the end of June, with 80 percent of those losses coming from companies with 20 employees or fewer, according to ASE. Some of those losses include clean energy-related jobs.

“Many of these contractors have just seen their demand plummet,” Ben Evans, a spokesman for the group, said.

Separately, the IRS last week extended the deadline for renewable energy companies to meet the requirements for federal tax credits, due to the pandemic.