The CEO of one of the country’s largest wind and solar farm developers has warned Congress not to “squander” an opportunity to boost his industry, which must scale quickly to meet domestic climate goals and catch competitors such as China.
Intersect Power, founded by Sheldon Kimber in San Francisco, is poised for expansion after developing more than 1.7 giga-tones of solar projects in California and Texas in its first three years of operation. It is expanding into new markets made possible by low-cost renewable energy, with another 4 giga-tones of projects planned for development by 2023, including green hydrogen and direct air capture.
The bipartisan infrastructure agreement being negotiated in the Senate and endorsed by President Joe Biden includes billions of dollars in funding to scale up emerging clean energy technologies.
It does little to help the green energy sector’s proven bread and butter, wind and solar power, which are spreading rapidly and cheaper than natural gas in some parts of the country but must grow massively to meet Biden’s target of using 100 percent carbon-free power by 2035. According to Kimber, in order to achieve the president’s goals, Biden and Democrats in Congress must deliver on their pledge to increase clean energy tax subsidies and require electric utilities to generate power from nonpolluting sources in a subsequent larger climate-focused infrastructure bill.
He has stated that Biden’s goal is “phenomenally aggressive,” but not “completely unrealistic” if policymakers take the necessary steps.
Kimber, who grew up in a series of small Ohio towns where coal mines closed, claims to be more conservative than most of his peers working on green energy. He is the son of a minister and a public school teacher who, he claims, were “politely asked to leave” their native South Africa because his father spoke out against apartheid from the pulpit.
Kimber spent five years at Calpine before founding Intersect Power, where she worked on the financing and development of natural gas-fired power projects.
Kimber has been vocal about what he sees as the most difficult challenge for renewable energy developers. He claims that there is a massive backlog of solar and wind projects across the country that are stalled due to the inefficient way that Washington distributes tax credits. While wind and solar developers have been eligible for production and investment tax credits for many years, in order to take advantage of these benefits, companies must work with banks to exchange the credits for financing.
According to Kimber, in this hypothetical “win-win,” banks reduce their tax liability, and renewable energy companies can build solar and wind farms.
However, according to Kimber, banks typically prefer to partner with large players with whom they already have pre-existing relationships, leaving small and medium-sized developers on the sidelines. Kimber and other proponents of renewable energy have urged Congress to remove the stumbling block (the bank’s ability to offer financing) and allow refunds for any unused tax credits.
This would allow clean energy developers to claim the tax breaks as direct cash payments, broadening the range of businesses eligible for the credits.
In his fiscal year 2022 budget request, Biden proposes to spend more than $265 billion on expanded renewable energy tax credits, which he would extend by ten years. In an effort to align the tax code with his aggressive climate regulatory agenda, Biden proposes eliminating more than a dozen tax breaks for fossil fuel companies. Many of the same favorable provisions for oil and gas companies are targeted in the Senate Finance Committee proposal.
Subsidizing renewable energy deployment has aided in the establishment of wind and solar farms in many rural areas across the country. However, Kimber believes that the federal government must also incentivize demand for green power through policies such as a clean electricity standard, which requires utilities to generate a growing percentage of their power from emissions-free sources by a certain date.
Senate Democrats working with Biden intend to include a version of this policy in their larger infrastructure bill, which would essentially pay utilities to use more clean energy.
According to Kimber, such a policy would enable the growth of wind and solar in the “right places” closer to larger power markets, as well as encourage the construction of transmission lines and storage technologies required to spread out the use of renewables.