This One is Simple: The Climate Solutions in the Reconciliation Bill

By Emily Cohen

Sometimes things seem too simple, especially when we face so many enormous and complex policy challenges as a nation and a world. So, when something has an easy fix, we tend to dismiss it. Tackling the reduction of U.S. carbon emissions that contribute to climate change and environmental calamity is easy.

We need to pass the climate provisions of the reconciliation bill (f.k.a. Build Back Better). We need to take these very straightforward policy actions to support the construction of more wind, solar, energy storage and other renewable energy technologies. My 7-year-old understands this. My 5-year-old understands this. My (quite bright) poodles might even understand this.

Now, I’m not saying this legislation is an overnight fix, but it’s affordable and would have an enormous impact on reducing the U.S.’s contribution to global carbon emissions. We have the tools and policy framework, technology and industry at-the-ready, and we even have the legislation 90% drafted. Even the often-vilified, good senator from West Virginia has signaled his willingness to get these provisions passed. So, what are we waiting for?

The Energy Sector Impact on Climate

Historically, the energy sector is responsible for 75% of global manmade greenhouse gas emissions1. That is not a small impact. Transportation and electricity are the two largest contributors to carbon emissions in the U.S., and as the transportation sector electrifies, the electricity sector is poised to become the biggest bad guy in this unfortunate contest.

In 2020, 62% of total U.S. electricity generation came from coal, natural gas, and petroleum fuels2. Coal specifically is used for a quarter of our total electricity supply, but it generates more than 60% of the carbon emissions from electricity generation3. Ramping up renewables is the simple path to decarbonizing the electricity sector. When you factor in the full scope of the solar lifecycle, from raw material extraction to disposal, solar energy’s CO2 contribution is 4% that of coal per megawatt-hour generated4 .

The bottom line is clear: as we collectively work to reduce our contributions to the changing climate, reducing CO2 emissions from our energy mix by building more renewable energy sources is imperative and an efficient way to achieve these goals.

The Reconciliation Bill

In Washington, today, sits the signature legislation that can effectively usher in the next generation of renewable energy expansion in the U.S. Although the original Build Back Better Act is unlikely to rise from the ashes, the Democrats’ reconciliation bill is slated to be the most impactful climate investment in U.S. history.

The climate provisions in the bill include funding for clean energy tax incentives, electric vehicles and charging stations, instituting a fee on methane pollution, building transmission lines, and helping communities facing climate disasters. These climate policies would fuel (pun intended) wide-scale deployment of clean energy technology domestically.

With this legislation, the U.S. can expect to reduce electricity sector emissions from today’s levels by at least 50% by 2030 by increasing solar, wind, and other renewables5. Past policy support — primarily through production and investment tax credits — unlocked investment in renewables successfully, resulting in significant growth of solar and wind projects across the U.S. over the past 20 years. It’s simple: these types of incentives work.

The Benefits for Renewables in the Reconciliation Bill

I love this legislation – yes, I love it. It makes so much sense. The direct-pay tax credits contemplated in the reconciliation bill will remove the artificial cap on renewable development imposed by limits on corporate taxation and open the sector up for a more diverse set of investors to support renewables – not just companies with significant tax liabilities. A production tax credit for solar will sensibly create incentives for solar-generated megawatt hours in lieu of today’s incentives which are pegged on capital deployment. New projects located in communities hit by coal power plant retirements, tribal land, or other areas in need of investment are incentivized, making climate equity and environmental justice part of the conversation as well.

Domestic manufacturing incentives will make supply more robust, further driving down the cost to generate clean energy and complement the global equipment market as well as supporting increased sector employment. The reconciliation bill also has a stand-alone energy storage tax credit, which will unshackle utility scale battery energy storage from solar projects and enable it to be built where it enhances energy reliability the most.

In addition to the environmental benefits of building more renewables, we are going to need that increased electricity production. With the electrification of the transportation sector and the imminent expansion of green hydrogen technologies, we can expect electricity demand to increase by 2% year over year6. Currently, the power plants needed for that increased demand are not being built – not by the fossil fuel industry nor a renewables industry that is constantly stymied by inconsistent federal policy.

Near-term investment in renewables makes sense across the board. Not only does it ensure a steadier path to a low carbon future, but it unlocks lower operating costs for our power grid to prevent rising costs of electricity in future decades. When landmark policies — like the reconciliation bill — pass, they have an impact beyond election cycles. We don’t have the luxury of waiting.

A Solution Waiting for Action

The truth is that while we are faced with massive public policy challenges, a major solution to climate change is one that we can put into motion now. The policy framework in the reconciliation bill is ready and waiting for us to make meaningful progress toward an existential threat to our country and the world. Plain and simple, to prevent the impacts and outcomes of the worst-case climate scenario, we need the clean energy provisions of the reconciliation bill to move forward, and we need them passed now. This one is simple; let’s get it done.

About The Author
Emily Cohen

Emily Cohen

Emily oversees origination, development, marketing, and policy. Her 20 years of renewable project development experience have led to more than 15 GW of operational wind and solar projects, as well as a creative variety of off-take contracts comprising another 4 GW. Prior to Primergy, Emily oversaw renewables commercial activities for ENGIE North America, while leading her team to a nationally recognized #1 position in utility-scale corporate PPA contracting.