Green energy CEO warns Congress not to 'squander' opportunity to boost industry

·5 min read

The CEO of one of the largest developers of wind and solar farms in the country is warning Congress not to “squander” an opportunity to boost his industry, which must scale rapidly to achieve domestic climate goals and catch competitors such as China.

Sheldon Kimber’s San Francisco-based Intersect Power is poised for growth after developing more than 1.7 gigawatts of solar projects across California and Texas in its first three years of existence. It is expanding into new markets enabled by cheap renewable power with another 2.4 gigawatts of projects planned to be developed by 2023, including green hydrogen and direct air capture.

THE CLIMATE MEASURES IN THE BIPARTISAN INFRASTRUCTURE DEAL

“The thesis of our business is we are not just a renewables company but aim to be vertically integrated to include industries of tomorrow,” Kimber told the Washington Examiner.

Kimber, 43, says a massive amount of renewable energy in the United States will remain on the sidelines unless federal policymakers take a pair of “simple steps.”

“We are in a good position regardless of what happens,” Kimber said. “The issue becomes what more we as an industry can do. We have a tremendous opportunity as a country to assert geopolitical and industrial leadership we haven't had for many years.”

The bipartisan infrastructure agreement advancing in the Senate and endorsed by President Joe Biden contains billions in funding to scale up emerging clean energy technologies.

It does little, however, to help the proven bread and butter of the green energy sector, wind and solar power, that are spreading rapidly and cheaper than natural gas in some parts of the country but need to grow massively to meet Biden’s target of using 100% carbon-free power by 2035.

Kimber says Biden and Democrats in Congress in a subsequent larger climate-focused infrastructure bill must deliver on their pledge to boost clean energy tax subsidies and require electric utilities to generate power from nonpolluting sources in order to achieve the president’s goals.

He has said Biden’s target is “phenomenally aggressive” but not “completely unrealistic” if policymakers take those steps.

Kimber proclaims himself more conservative than most peers working on green energy, having grown up in a series of small Ohio towns where coal mines closed. He is the son of a minister and a public school teacher who he says were “politely asked to leave” their native South Africa because his father was vocal from the pulpit opposing apartheid.

Before starting Intersect Power, Kimber spent five years at Calpine, working on the financing and development of natural gas-fired power projects.

“I am not a zealot,” Kimber said. “I am not looking to stick it to the oil and gas industry. I am just a realist who sees what we need to do as a society. As a businessperson, we need to prepare to thrive in the future. Whether we agree on the policy road, the world is going down the road of regulating carbon.”

Kimber has been outspoken about what he sees as the biggest challenge facing renewable energy developers. He says there’s an enormous backlog of solar and wind projects across the country that are stalled out because of the inefficient way that Washington provides tax credits.

While wind and solar builders have been eligible for production and investment tax credits for years, to make use of these subsidies, companies have to partner with banks to exchange the credits for financing.

In this theoretical “win-win,” Kimber said, banks get to reduce their tax liability, and renewable energy companies are able to build solar and wind farms.

But Kimber says banks usually like to partner with big players that they have pre-existing relationships with — leaving small and medium-sized developers on the sidelines.

The tax equity markets were especially frozen amid the economic fallout from the pandemic, which created a financing shortfall of roughly $23 billion, or 31 gigawatts worth of solar and wind projects nationwide, according to the Solar Energy Industries Association.

Kimber and other renewable energy proponents have urged Congress to remove the choke point (the bank’s ability to offer financing) and allow refunds for any unused tax credits.

That would enable clean energy developers to claim the tax incentives as direct cash payments in order to expand the scope of companies that can take advantage of the credits.

Biden’s fiscal year 2022 budget request proposes to do just that, aiming to spend more than $265 billion on expanded renewable energy tax credits, which he would extend by 10 years.

A clean energy tax proposal advanced by Democrats on the Senate Finance Committee also includes a “direct pay” provision, as does a green energy tax package introduced by House Democrats.

While critics might question why the maturing renewable industry needs more help, Kimber notes there are provisions in the tax code benefiting fossil fuel companies that have existed for 100 years.

Biden is proposing to eliminate more than a dozen tax breaks for fossil fuel companies in an effort to align the tax code with his aggressive climate regulatory agenda. The Senate Finance Committee proposal also targets many of the same favorable provisions for oil and gas companies.

“Our competitors are some of most highly subsidized industries,” Kimber said. “There is a little bit of, ‘I will put my gun down if you put down yours.’”

Subsidizing renewable energy deployment has helped saturate many rural areas of the country with wind and solar farms. But Kimber says the federal government must also incentivize demand for green power with a policy such as a clean electricity standard that requires utilities to generate a growing percentage of power from emissions-free sources by a certain time.

Senate Democrats working with Biden are planning to include a form of that policy as part of their larger infrastructure bill that would essentially pay utilities to use more clean power.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

Kimber says a policy like this would enable the growth of wind and solar in the “right places” closer to larger power markets and encourage the buildout of transmission lines and storage technologies needed to spread out the use of renewables.

“It’s now about meeting a different quality of renewable power,” Kimber said. “We need to be able to move it places and store it to address all of America’s power needs.”

Washington Examiner Videos

Tags: News, Energy and Environment, Wind Energy, Solar Energy, Climate Change, Fossil Fuels, Texas, California, Taxes, Regulation

Original Author: Josh Siegel

Original Location: Green energy CEO warns Congress not to 'squander' opportunity to boost industry

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting