VC group urges Congress to protect IRA’s green tech tax credits

The National Venture Capital Association has joined the fight to save the Inflation Reduction Act’s clean energy tax credits.

In a letter to the House Ways and Means Committee, the NVCA expressed its support for green tech tax credits now that they’re on the chopping block. Similar to a letter to Congress from green tech business leaders, the NVCA letter emphasized the importance of reliable tax policy for economic development—especially when it comes to startups, which traditionally begin with no or low taxable income.

“Scaling breakthrough energy technologies requires sustained, reliable policy support,” the letter said. “The IRA credits provide the kind of certainty needed to attract long-term investment in American energy innovation, creating jobs, economic growth, and enhancing American energy security.”

To that point, the letter also spotlighted specific IRA tax credits that aid clean tech startups in getting off the ground: provisions allowing for tax credit transferability, which helps early-stage companies fund their initial work; a provision allowing small-scale carbon capture companies to get credits; an investment tax credit that incentivizes supporting domestic clean tech companies; and the investment tax credit for standalone energy storage.

“These credits have played a critical role in supporting early-stage energy technology innovation, enabling promising startups to scale, reduce costs for American consumers, and strengthen our nation’s energy security,” the letter said.

Unlike the BCSE letter, the NVCA’s statement was only signed by NVCA President and CEO Bobby Franklin and not other members of the association. However, it did specifically disclose that both Fervo Energy and Base Power used the IRA clean energy tax credits to deal with “long commercialization timelines and significant capital needs.”

And though the prognosis for the survival of the clean energy tax credits is currently “pretty bad,” according to IRA tax credit proponent Rep. Andrew Garbarino (R-NY), many trade and business organizations are sending the message to members that the fight is far from over.

“Keep pushing. After the committee votes, it will go to the House floor. If it passes, it will go to the Senate and additional changes will be made there. Then, the House and Senate bills will be reconciled before getting voted on by both chambers again,” Solar Energy Industries Association President Abby Hopper said in a LinkedIn post. “This is a marathon, and we need to sprint every step of the way.”