"The tax credits that underwrote America’s renewable energy revolution are set for a makeover as part of the $1.75 trillion reconciliation bill.
As written, the Democratic proposal would dramatically revamp the subsidies available to wind and solar projects, requiring developers to use union labor and American-made products to receive the full value of the subsidy. The bill also includes a bonus for projects built in former coal communities.
The changes reflect the maturation of the renewable industry and the evolution of American climate policy. Where the intent of the tax subsidies was once to lower the cost of renewables, today it is to deploy renewables and create jobs, especially in communities where they have been scarce.
The shift owes in large part to the plunging price of wind and solar. Lazard Ltd., an investment firm, estimates that the cost of building and operating a wind farm has fallen 72 percent in the last decade. Solar costs have plunged 90 percent. Both are cheaper than existing coal plants without subsidy, and can compete with gas and nuclear.
The plunging costs come amid a pivot among Democrats in Washington. Increasingly, the party’s climate hawks are focused on integrating their climate and economic priorities. The intertwining aims are evident in the reconciliation bill."
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