The White House is tossing a lifeline to clean energy projects — extending a key tax credit to help defray the rising costs of building offshore wind turbines and battery storage.

The high costs of steel and interest rates are hurting the prospects of a major potential source of carbon-free electricity: wind farms off the Atlantic coast. Earlier this month, Danish developer Ørsted canceled a massive offshore wind project off the coast of New Jersey.

The decision to cancel Ocean Wind, which had been expected to provide power to nearly 1 million people in the Northeast, was viewed widely as a warning signal of the industry’s straits.

If more dominoes fell, that could put out of reach President Joe Biden’s goals for using large-scale wind power to slash carbon pollution tied to America’s appetite for electricity.

“While macroeconomic headwinds are creating challenges for some projects, momentum remains on the side of expanding U.S. offshore wind,” John Podesta, a senior White House energy adviser, told reporters.

The proposed tax guidance from the Treasury Department and IRS clarifies that the undersea cables that tie into the electric grid qualify for so-called Section 48 investment tax credits under the Inflation Reduction Act, write Heather Richards and Brian Dabbs.

Battery storage and smaller-scale solar projects also qualify under the credit.

‘It’s messy’

The response from the renewable energy industry came swiftly today. Companies and advocates had been pressing the White House to act more quickly.

Gregory Wetstone, CEO of the American Council on Renewable Energy, applauded the administration for “fully maximizing” the climate law to boost the industry’s shot at success.

Significant push and pull has sent mixed signals about the state of clean energy. Solar stocks are dipping, but rooftop solar installations are at record levels. Electric vehicle sales are up even as auto companies recoil at the billions of dollars going into building battery and EV manufacturing plants.

The offshore industry is on track to open two major wind farms in the U.S., but developers canceled about a quarter of the contracts for wind power. Turbine manufacturers are awash in red ink.

“It’s messy,” said Andrew Hoffman, a professor of sustainable enterprise at the University of Michigan. “I’ve always struggled with the idea that we’re going to deal with climate change, make ourselves rich and live happily ever after.”

It’s Friday — thank you for tuning in to POLITICO’s Power Switch. I’m your host, Minho Kim. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to [email protected].

Today in POLITICO Energy’s podcast: Jordan Wolman breaks down efforts by Democrats in Pennsylvania and Virginia to join a regional greenhouse gas trading program.

DOE speeds up some transmission projects
The Department of Energy proposed fast-tracking the permitting process for battery, solar and transmission projects near lands already disturbed by energy infrastructure, writes Brian Dabbs. But clean energy advocates said the measure would do too little to ease the transmission backlog that is hindering expansion of renewable energy capacity.

One advocate called the new permitting rule “barely a drop in the bucket,” while another labeled it a “nice step forward” that falls short of “a game-changer.” The department also removed a rule that limited express permitting to transmission lines under 20 miles.

Chinese dominance on solar worries British lawmakers
Much like Republicans in the U.S., hawkish Conservative members in the U.K. Parliament are deeply concerned about Chinese dominance of the global solar industry, write Abby Wallace, Eleni Courea and Esther Webber.

China controls 80 percent of the global solar manufacturing market, including both finished solar panels and the raw materials required to build them. The U.K. aims to scale up its solar power capacity to 70 gigawatts by 2035 from the current 15 gigawatts.

Wealthy nations finally kept their climate money pledge
Rich countries fulfilled an overdue promise to put down billions for projects in developing nations that will help mitigate disastrous impacts from climate change, writes Sara Schonhardt. Developed nations broke their 2009 promise to deliver $100 billion by 2020, hampering trust at global climate talks around a new, separate “loss and damage” fund for poorer nations.

A report released Thursday found that rich countries are likely to have reached the $100 billion mark for the old fund. But the financial needs for addressing climate impacts could now be in the trillions, projected to reach roughly $2.4 trillion a year from 2026, according to the Organization for Economic Cooperation and Development.

Textbook fights: How science textbooks in Texas address climate change is at the center of a key decision by Texas’ education board Friday after some Republican education officials criticized books for being too negative toward fossil fuels.

More gas flowing: Russia has lifted restrictions on gasoline exports, its energy ministry said Friday, saying there was a surplus of supply while wholesale prices had declined.

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Michigan’s big climate package angered environmental justice advocates who are urging Democratic Gov. Gretchen Whitmer to veto a clean energy standard that includes natural gas power plants with carbon capture.

Cutting carbon emissions sharply over the next three decades will prevent tens of thousands of deaths in the U.S. and save trillions of dollars by reducing air pollutants and easing climate-fueled disasters, according to a report by the Union of Concerned Scientists.

Electric customers in New York will be paying more to subsidize the installation of electric vehicle charging stations as the state recalibrates its EV targets.

That’s it for today, folks. Thanks for reading, and have a great weekend!