Wind and solar generation, energy efficiency and carbon capture all won tax break extensions in an energy bill included in the massive stimulus and budget bill approved by Congress Monday night.

While far from the ambitions of the Green New Deal, the Energy Act of 2020 includes several measures to address climate change, including an agreement to phase out the use of hydrofluorocarbons used in air conditioning and refrigeration. That puts the U.S. in line with other nations whose efforts could help avoid as much as a half-degree Celsius in global warming by the end of the century. The bill also includes a “sense of Congress” statement that the Energy Department prioritize funding for research to transition to 100% “clean, renewable or zero-emission energy sources.”

The bill includes a two-year extension of the investment tax credit (ITC) used by solar power generators (keeping the ITC at 26% through year-end 2022 instead of falling to 22% in calendar year 2021), a one-year extender for the production tax credit (PTC) used by wind developers and a new 30% ITC for offshore wind projects that commence construction by the end of 2025.

In addition, the in-service window for the 45Q carbon capture and sequestration credit was extended by two years to the end of 2025 and waste-to-energy projects also will be eligible for the ITC.

The bill also re-authorizes the Advanced Research Projects Agency–Energy and the Weatherization Assistance Program through fiscal year 2025 and requires the secretary of the interior to seek to permit at least 25 GW of wind, solar and geothermal projects by 2025.

The provisions — consensus provisions from the Senate’s American Energy Innovation Act (S. 2657) and the House’s Clean Economy Innovation and Jobs Act (H.R. 4447) — were included as Division Z of the Consolidated Appropriations Act of 2021, a must-pass bill for Congress.

Sens. Lisa Murkowski (R-Alaska) and Joe Manchin (D-W.Va.), the sponsors of the Senate bill, called the legislation “the first comprehensive modernization of our nation’s energy policies in 13 years.”

Murkowski, chairman of the Senate Energy and Natural Resources Committee, and Manchin, the ranking member, negotiated what they called a “six-corner” agreement with Reps. Frank Pallone (D-N.J.) and Greg Walden (R-Ore.), the chair and ranking member, respectively, of the House Energy and Commerce Committee, and Reps. Eddie Bernice Johnson (D-Texas) and Frank Lucas (R-Okla.), chair and ranking member of the House Science, Space and Technology Committee.

The bill “provides a down payment on the technologies that will be critical to reducing greenhouse gas emissions in the power sector, industry, and buildings and addressing climate change,” Manchin said in a statement. “This focus on research, development and demonstration will create high quality jobs and ensure the United States continues to lead the world in the clean energy future.”

“This is perhaps the most significant climate legislation Congress has ever passed,” Grant Carlisle, a senior policy adviser for the Natural Resources Defense Council, told The Washington Post.

“But, overall, the bill is a mixed bag because of provisions that prop up dirty fuels and unsafe technologies,” John Bowman, managing director for government affairs at NRDC said in a statement. “Given President-elect [Joe] Biden’s historic commitment to address our climate crisis, we look forward to working with him and the new Congress to promote the genuine clean-energy transition we need.”

Here is a list of some of the most significant provisions:

Among the other provisions:

• Advanced Nuclear: updates the definition of “advanced nuclear reactor” to include small modular reactors; (See NRC OKs NuScale’s Small Modular Reactor Design.) authorizes an R&D program to help build a competitive fusion power industry
• Carbon Capture, Utilization and Storage (CCUS): directs the Department of Energy to establish RD&D programs for carbon storage, carbon utilization and direct air capture, including a large-scale carbon sequestration demonstration program
• Energy Storage: includes RD&D provisions for energy storage and qualifies storage for loan guarantees under Title XVII of the Energy Policy Act of 2005
• Energy Efficiency: requires DOE to implement smart building technology in federal buildings and report to the president and Congress on each agency’s energy savings performance contracts, including their initial guaranteed savings compared to actual energy savings from the previous year; establishes rebate programs to encourage replacement of inefficient electric motors and transformers; formally authorizes the Federal Energy Management Program
• Supply Chain: requires the executive branch designate a list of critical minerals and update that list every three years, an effort to rebuild domestic supply chains; expands and extends limitations on Russian uranium imports
• Grid Modernization: re-authorizes the smart grid demonstration program in the Energy Independence and Security Act of 2007, and adds commercial application of distribution automation technologies to program goals; authorizes an RD&D and commercial application program on modeling emerging technologies for security and reliability and technologies to improve sensing, monitoring and visualization
• Technology Transfer: creates programs to aid private sector access to DOE and its National Laboratories
• FERC: authorizes FERC to modify compensation to attract and retain individuals with highly specialized skillsets

‘Sweeping Update’

The bill won wide praise from renewable energy supporters.

“Stable policy support will help ensure that wind and solar can continue providing the backbone of our country’s electricity growth,” said Heather Zichal, CEO of the American Clean Power Association. “We also applaud Congress for recognizing the enormous potential of offshore wind, America’s largest untapped electricity source.”

Gregory Wetstone, CEO of the American Council on Renewable Energy, said that 13% of the clean energy workforce is currently out of work because of the coronavirus pandemic. “Extending the solar and wind tax incentives and making the investment tax credit available for offshore wind projects is a bipartisan vote of support for the renewable industry and the hundreds of thousands of Americans building our clean energy future. These policies will help get people back to work,” he said.

“Clean energy was the biggest job creating sector in the economy pre-COVID,” said Rob Cowin, director of government affairs for climate and energy for the Union of Concerned Scientists.

“This omnibus legislation features a sweeping update and expansion of federal research, development and demonstration programs for carbon capture, removal, use and storage … along with enactment of a two-year extension of the 45Q tax credit,” Carbon Capture Coalition Director Brad Crabtree said. “While the coalition’s other top priority of a direct-pay option for 45Q did not make it into the final package, the measures included in the omnibus make this year-end legislation the most important accomplishment for carbon capture and removal since passage of the 2018 FUTURE Act that reformed and expanded the 45Q tax credit.”