In recent months, communities across Massachusetts have been reeling from the effects of extreme weather. In response, state officials last week celebrated Climate Week by announcing a series of grants and policy initiatives aimed at combating climate change and protecting against its impacts.
But what many don’t realize is our elected officials are in a position to drive investments in sustainability that reach far beyond the borders of the Bay State.
Congress is currently putting together the details of the federal budget reconciliation package, a must-pass piece of legislation that includes critically important policies to address the existential threat of climate change. As the chairman of the influential Ways and Means Committee, Massachusetts’ very own Rep. Richard Neal has shown true leadership in ensuring his committee’s portion includes clean energy tax provisions that are vital to addressing the climate crisis. He now has the chance to make sure those clean energy incentives benefit everyone.
Rep. Neal and his colleagues can include in the bill a provision that would allow millions more Americans to access tax breaks for installing solar panels on their homes — including working families who are often shut out of the current incentive programs.
Fully 42 percent of energy-related greenhouse gas pollution in America comes from decisions made in the household. Incentivizing homeowners to reduce their emissions by installing solar or other clean energy technologies would have a profound effect on combating climate change.
A recent working paper from the RAND Corporation shows that a simple change to the federal solar Investment Tax Credit — our country’s most successful and important policy support for solar — can provide greater access for low- and moderate-income households.
By making the tax credit refundable or directly paying customers, it would be accessible to all homeowners — not just those with higher incomes. This is essential to ensure all families can access the benefits of clean energy, including cleaner air and lower monthly energy bills.
Without direct pay, an estimated 26 million households nationwide — including 3.2 million Black households and 3 million Hispanic households — are unable to utilize the residential solar tax credit simply because they do not have sufficient taxable income.
As a result, disadvantaged communities have less than half of the installed residential solar capacity of the wealthiest neighborhoods. They also face significant electricity bill burdens, with a higher percentage of their monthly household expenses going to utilities. According to the RAND paper, lower-income homeowners could receive a benefit of approximately $4,600 by installing the average residential rooftop solar system, if the homeowner solar tax credit was extended and made refundable.
Under the current policy, it takes on average more than seven years for someone in the bottom 50 percent of U.S. income earners to access the full value of the tax credit — putting solar out of reach for millions of Americans.
This is not only unfair to families who could benefit from clean energy, it also limits our nation’s ability to combat the climate crisis.
Extending the investment tax credit for homeowners and making it refundable would also create a platform for job growth. The solar industry today supports more than a quarter-million jobs in the United States, with almost 10,000 in Massachusetts alone, and is expected to grow by more than 50 percent through the end of the decade. Three-quarters of the jobs are in residential or community solar, jobs typically provided by local small businesses.
Massachusetts is already on its way to expanding renewable energy use, storage and efficiency, having set a statewide goal to reach net-zero emissions by 2050. In Rep. Neal’s own district, the city of Springfield has developed a 4.7-megawatt community solar array, built on a former landfill, that is providing affordable electricity to hundreds of income-qualified residents. These are critical first steps, but much more work needs to be done if we’re going to hit the ambitious decarbonization and clean energy goals of Massachusetts and other states in the decades to come.
We need more than just clean, low-carbon energy; we also need equitable and affordable access to it. Rep. Neal and his colleagues in Congress need to seize the moment and make changes to the solar Investment Tax Credit that will make it truly accessible to all families. Amid heated political debate and competing priorities, this is a win-win that we can all support. Now is the time to ensure that the renewable energy revolution doesn’t leave anyone behind.