President Joe Biden has been inaugurated and is well into his first year as president and the future of solar energy looks promising. Biden has previously laid out a $2T plan to propel the United States into a new era of energy that aims to have 100% carbon-free electricity by 2035. This is an ambitious goal, so how would it be enacted? What does it mean for commercial property and business owners?
What is Biden’s Plan?
Biden’s $2T plan would require some sweeping changes and reversals. The proposals included the extension of clean energy and efficiency tax credits, the installation of millions of solar panels, and the erection of thousands of wind turbines both onshore and offshore. Not only that, but Biden wants to do all of this in the first four years of the presidency.
Sure, this plan is ambitious, but it is achievable and experts believe that the economic failures spurred by the coronavirus pandemic could help accelerate the plan. Americans for a Clean Energy Grid said that the modernization and expansion of the energy grid would create more than 6 million jobs, save $100 billion in consumer spending, and cut carbon pollution from traditional electricity over 80 percent.
Florida Power & Light is on a similar mission and is committed to adding 30 million solar panels by 2030. Currently, there are around 60 thousand onshore turbines in the United States and the number is rapidly climbing. The installation of thousands of offshore turbines will be more difficult to implement, but far from impossible.
Biden proposed that the electricity produced by these renewable energy plants should be transported with existing rights of way along railway systems and roads. This will ease the transmission permitting and make the process easier.
This plan would be paid for by the reversal of tax cuts that were passed by the Trump administration and fellow Republicans in 2017. However, the proposed tax rate would still remain lower than the 35 percent rate that was in effect before the Tax Cuts and Jobs Act of 2017.
In addition, Biden has already staged the United States’ imminent return to the Paris Climate Accord. He was also a major contributor to the strides that were made for green energy during the Obama administration. The Paris Agreement requires the members to strategize and report the contributions each country makes to mitigate global warming.
The Solar Energy Industries Foundation urges the Biden administration to extend the federal Investment Tax Credit. They encourage the investment of clean energy infrastructure that can create jobs. In addition, this could force the current leaders in the industry to vigorously pursue clean energy alternatives. They also want to create a comprehensive carbon policy.
How Will This Affect Business and Commercial Property Owners?
Biden’s administration is much more likely to extend the Investment Tax Credit, or the ITC. The ITC has changed throughout the years since it went into effect. The ITC has been scaled down from 30 percent to 22 percent in the last few years. The Biden administration is expected to extend the 22 percent rate through 2025 instead of increasingly scaling the ITC down through the next few years.
Additionally, some experts believe that direct payments instead of tax credits may be a possibility for the future. This may be unlikely, but the Biden administration is a huge step in the right direction.
In 2018, President Trump placed a 30 percent tariff on the majority of silicon solar cells and modules. However, the strength of the tariffs has begun to wane because of the huge demand from the solar marketplace in the United States. The Section 201 tariffs will be staged out in 2022, but The Solar Energy Industries Foundation would like Biden to remove them before then. Either way, the price of the solar systems will likely decrease substantially in the upcoming years. This and the tax credit provide a good reason to switch to renewable energy.
In Conclusion
The Biden administration is set to make leaps and bounds for the progression of the energy industry in the United States. His $2T plan strives to significantly reduce carbon-electricity emissions. It is likely that commercial property owners will continue to receive the Investment Tax Credit when converting to solar energy for years to come. This, along with the decreasing price of solar systems and the savings for you and the environment makes a good argument to switch to renewable energy sooner rather than later.
