Letter to Congress: Include Clean-Energy Tax Credit in Tax Reform

Letter sent to all members of Congress across Horizon Power’s territory on October 27, 2017:

Horizon Power Systems is the exclusive distributor among 13 states – including Wyoming — of low-emission Capstone Microturbines, an advanced, energy-saving power technology that is eligible for a clean-energy Investment Tax Credit (ITC) that inadvertently expired in 2016.

I am writing to urge you to support the inclusion of clean-energy tax credit language (S.B. 1409 & H.B. 1090) ) in tax reform proposals. The bill retroactively extends the Investment Tax Credit for microturbines, combined heat and power, fuel cells, small wind and thermal energy through 2021.

For over eight years, the ITC has helped hospitals, manufacturers, universities, data centers and other facilities secure clean-and-green microturbines as part of Combined Heat & Power (CHP) systems. Microturbines and CHP dramatically cut a business’s energy costs and greenhouse gas emissions.

American-made Capstone Microturbines create electricity and capture the microturbine’s waste heat to heat and cool buildings. Microturbines in CHP systems:

  • achieve 80%-90% energy efficiency (considerably better than grid power’s 33% efficiency)
  • cut greenhouse gas emissions 40%
  • boost energy savings
  • decrease power outages
  • eliminate transmission and distribution losses from central power plants.

Unfortunately, the tax credit expired last year. Since 2008, this tax code has included a modest 10% ITC for CHP projects that are less than 25 megawatts and include microturbines, among other technologies.

To encourage use of CHP, the Administration should defend and extend tax incentives for CHP through legislation that would amend the tax code in the following ways:

  1. Retroactively extend the Sec. 48 ITC for fuel cells, small wind, combined heat and power, microturbines, and thermal energy through 2021
  2. Gradually reduce credits for technologies that initially qualified at the 30% level on the same schedule as currently provided for solar power
  3. Increase the geothermal electric ITC from 10% to 30%, with a gradual reduction akin to solar
  4. Add Waste Heat to Power as a qualifying technology for the Sec. 48 ITC
  5. Extend the Sec. 25D residential credit for these technologies through 2021, with a gradual reduction akin to solar

“Must Pass” Legislation

CHP is well regarded because it complies with many federal and state air quality regulations.  However, the initial capital cost of a CHP project can be a barrier, whether power comes from a microturbine, fuel cell, geothermal, small wind or thermal system.  This legislation is “must pass”. Our country needs ITC to assist with financing.  Without it, we could see:

  • limited business and job growth (especially in engineering and construction)
  • decreased economic activity
  • reduced energy independence
  • continued deterioration of the U.S. power grid
  • weakened national security

Horizon Power Systems requests that you support inclusion of tax credit language (S.B. 1409 & H.B. 1090) ) in the tax reform package. Your support will make American manufacturing more competitive and create new business opportunities and jobs. Without it, key resources that support energy efficiency could be eliminated.