An energy tax proposal was introduced in both the House and the Senate aimed at encouraging technology innovation across the energy sector, including solar, wind, hydrogen, energy storage, as well as fossil fuels and nuclear.
The Energy Sector Innovation Credit (ESIC) Act would incentivize clean energy innovation to scale up and compete. The credit is designed to scale down as technologies’ market penetration grows, a device intended so that taxpayer dollars do not subsidize market-mature technologies.
The bill was introduced by Sheldon Whitehouse (D-RI), Mike Crapo (R-ID), and is co-sponsored by John Barrasso (R-WY), Michael Bennet (D-CO), Jim Risch (R-ID), and John Hickenlooper (D-CO). House Ways and Means Members Tom Reed (R-NY) and Jimmy Panetta (D-CA) introduced identical legislation in the U.S. House of Representatives.
The bill’s sponsors said the credit is designed to offer a flexible investment tax credit (ITC) or production tax credit (PTC.) It would target technologies in electric power generation, storage, and carbon capture. Fossil fuel and nuclear technologies are covered as is the production of “clean” hydrogen.
Among its provisions:
- Allows up to a 40% percent ITC or 60% PTC for low market penetration technologies across a range of energy sources.
- Phases out credits as technologies mature, intended to provide an on-ramp for technologies to get to market and compete on their own.
- Groups technologies that are different from one another as determined by the Department of Energy (DOE), national labs, and other stakeholders.
- Allows for “unforeseen” clean energy technologies to be eligible by including an expedited-consideration provision for Congress to take up new technology recommendations from DOE.
The bill is supported by groups that include the Evangelical Environmental Network, the U.S. Nuclear Industry Council, the Nuclear Energy Institute, The Nature Conservancy, Clean Air Task Force, American Public Power Association, Long Duration Energy Storage of California, Environmental Defense Fund, Carbon Utilization Research Council, Clean Hydrogen Future Coalition, American Petroleum Institute, and National Rural Electric Cooperatives Association.
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