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How Biden's Infrastructure Plan Would Impact Electric Transmission, Solar and Wind

Electric infrastructure

President Biden proposes to spend more money on clean energy than any other administration in US history through his infrastructure plan. Should the plan win passage as it stands now, businesses and utilities will be able to better employ tax incentives for clean energy. It would also give rise to a more abundant supply of renewable energy with increased transmission to move electricity from large wind and solar farms to population centers.

The goal of the $2.3 trillion American Jobs Plan aims to modernize the US electric grid and expand existing infrastructure to combat climate change, create jobs and increase nationwide access to reliable power.

The plan offers significant support for high-voltage electricity transmission and renewable energy. 

The administration has identified 22 major transmission projects that will create 600,000 jobs in the expansion and improvement of the nation’s electrical grid. With a large and more reliable high-voltage infrastructure, the proposal is expected to create an additional 640,000 jobs for the development and generation of new clean energy. 

New and extended tax credits and Incentives

The White House wants utilities to reach 100% carbon-free emissions by 2035. To incentivize this, the administration’s “direct pay provision” will help streamline utility access to tax credits, with an estimated $200 billion in spending toward a green energy transformation. 

To continue the nationwide adoption of renewable energy, Biden’s plan will extend the phase down of the 26% federal solar investment tax credit for an additional 10 years on residential, commercial and utility-scale installations.

The proposal also seeks extensions and reform for the 45Q tax credit, which provides performance-based incentives for carbon capture projects and organizations.

Beyond this, the administration plans to create a new federal tax credit for energy storage that would apply to stand-alone systems, which were previously ineligible if not connected to a renewable energy generator. The plan will also incentivize at least 20 GW of new high-voltage capacity transmission lines to help facilitate private investment in the grid modernization with a new “transmission tax credit.”

Among other investments and developments for underserved populations, the White House’s infrastructure plan is set to include $6.5 billion in loans specifically for clean energy, storage and transmission projects in rural communities.

Grid Deployment Authority and fast-tracking development

A key element of Biden’s infrastructure plan is the creation of the Grid Deployment Authority within the Department of Energy (DOE). The Grid Deployment Authority will support creative financing tools and leverage existing rights-of-way along roads and railways to accelerate the development of new high-voltage infrastructure.

The plan is a joint effort between the Department of Energy and the Department of Transportation. If enacted, the new infrastructure strategy will help accelerate the decarbonization of the United States while employing hundreds of thousands of American laborers, electricians, line workers and green energy developers. 

Energy Secretary Granholm cites new DOE financing projects being put into place to “improve resilience and expand transmission capacity across the electrical grid, so we can reliably move clean energy from places where it’s produced to places where it’s needed most.”

More than anything, the funding has been put into place to avoid power outages like the Texas power crisis in February. Specifically, the Western Area Power Administration’s Transmission Infrastructure Program and the DOE’s Loan Programs Office are each seeking applications for new and innovative electric transmission projects.

Infrastructure, manufacturing and other improvements

In addition to thousands of miles of new high-voltage transmission lines, the plan’s grid improvements will be supported by the modernization of US roads, bridges, highways, airports and public transportation vehicles. The plan aims to also revitalize domestic manufacturing with added zero-emission fueling, charging stations and transportation infrastructure.  

Specifically, the White House is currently proposing the following spending: 

  • $174 billion to help the United States win the electric vehicle (EV) market.
  • $46 billion in clean energy manufacturing and supply chain development.
  • $35 billion in research and development (R&D) efforts to address the climate crisis.

The plan’s R&D funding will help investigate new sustainable opportunities for energy storage and carbon capture methods. With flexibility and innovation as the administration’s driving forces, projects are proposed to advance developments in nuclear, offshore wind, green hydrogen, biofuels, EV components and quantum computing.

Aside from electricity, the infrastructure plan includes incentives for improving energy efficiency in American buildings and moving away from fossil fuel heating sources. Beyond energy, the proposal also contains many efforts to improve drinking water and broadband infrastructure throughout the United States.

What’s next?

To fund the transformation, the Biden administration plans to raise $2 trillion over the next 15 years by resetting the average corporate tax rate to 28%, eliminating incentives to move jobs and profits overseas, imposing a corporate "minimum tax,” and more strictly enforcing penalties for heavy carbon polluters.

The plan has gained national support from developers and advocacy groups within the nuclear, solar and wind energy development and storage industries. Meanwhile, fossil fuel proponents are pushing back on the elimination of oil and gas industry tax breaks.

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So not surprisingly the plan is struggling to receive unanimous bipartisan support in Congress. With blowblacks on the corporate tax hike, Senate Minority Leader Mitch McConnell has expressed that the necessary infrastructure improvement projects should be funded a different way.

The coming weeks and months will reveal whether the ambitious clean energy plan will survive, in all or part, the partisan strife of Washington.

Priority Power helps our partners meet their energy goals through comprehensive structuring, management and operational programs. For more information, feel free to read our most recent energy blog posts.

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