July 12, 2023 (Washington, D.C.) — The Combined Heat and Power Alliance along with 53 other organizations — including manufacturers, non-profits, trade associations, engineering firms, end-users, and environmental advocates — sent a letter to key House leaders strongly opposing efforts to repeal clean electricity tax credits established by the Inflation Reduction Act.
The full House of Representatives will vote in the coming weeks on the Build It in America Act (H.R. 3938), which aims to repeal the investment and production tax credits that have spurred major new renewable energy development. Since the law’s passage, companies have announced nearly 200 new clean energy projects totaling nearly $243 billion in investment nationwide.
“Repealing these credits will undermine the competitiveness of America’s manufacturers and businesses,” the letter states, noting that the tax credits will enable “the cost-effective development of clean energy sources such as solar, wind, combined heat and power, renewable natural gas, biomass, geothermal, renewable propane, and clean hydrogen.”
“Repeal of these tax credits will also undermine rural economic development by eliminating incentives to encourage efficient use of clean fuels, many of which are produced and used in rural areas across America,” continues the letter, which was sent to bipartisan House leadership and members of the Ways and Means Committee, the Building Trades Caucus and the Problem Solvers Caucus..
As the Department of Treasury and the Internal Revenue Service continue releasing IRA tax guidance, the CHP Alliance and its members will strongly advocate for CHP systems that use clean fuels to be eligible for the tech-neutral tax incentives going into effect in 2025. These credits will play a critical role in accelerating the adoption of CHP systems powered by renewable fuels.
While the CHP Alliance opposes the tax credit repeal (contained in Sections 301 and 302 of Title III), the Alliance does support certain other provisions of the Build It in America Act, namely:
- Section 103 – Extension of the 100% Bonus Depreciation, which restores the 100% bonus depreciation for qualified property, instead of the current 20% annual phase down that went into effect on January 1, 2023.
- Section 174A – Temporary Rules for Research and Experimental Expenditures, which would allow companies to immediately deduct R&D expenses instead of amortizing those expenses over five years (which becomes 15 years if the R&D is done overseas).
You can view the full letter and list of signatories here.