Boon for ‘dynamic glass’ offers window into budget bill lobbying

Manufacturer ramped up campaign donations to key members of tax-writing panels and vulnerable incumbents

Rep. Steven Horsford, D-Nev., has championed the energy tax break in the House. (Tom Williams/CQ Roll Call file photo)
Rep. Steven Horsford, D-Nev., has championed the energy tax break in the House. (Tom Williams/CQ Roll Call file photo)
Posted January 10, 2022 at 6:00am

A few lines tucked into Democrats’ $2.2 trillion social safety net and climate package would expand eligibility for renewable energy tax credits to a specific type of adjustable-tint window glass — an effort backers hope will expand the market for what’s known as “dynamic” or “smart” glass in energy-efficient building construction.

Supporters say the technology has proven climate benefits and would create more U.S. jobs than other energy-saving window options. They wrote the benefit into the package as a top smart glass manufacturer — Milpitas, Calif.-based View Inc. — ramped up campaign donations, filling the coffers of key members of tax-writing committees and vulnerable incumbents. The provision also has other backers, but View has been a vocal supporter previously, and federal lobbying records and a source with knowledge of the discussions pointed to the company’s involvement and backing.

The glass provision is part of a $325 billion series of tax breaks meant to incentivize a shift toward renewable electricity, zero-emission vehicles, sustainable fuels and more energy-efficient homes and buildings. They make up the key plank of Democrats’ efforts to combat climate change through the filibuster-proof budget reconciliation bill in its current form.

Many of the benefits offer "bonus credits" for buying products that are U.S.-made or meet greenhouse gas emission reduction goals. According to proponents, the glass provision takes an extra step toward those goals by picking the best technology on the market.

The provision would add “electrochromic glass,” the technical term for the product, to a tax credit for investment in clean energy property.

Consumers would get a 6 percent credit to defray costs as long as installation begins before 2027, rising to 30 percent if thresholds are met for using U.S.-made materials, paying workers the area prevailing wage and hiring from qualified apprenticeship programs. It’s similar to a bill Rep. Steven Horsford, D-Nev., and Sen. Edward J. Markey, D-Mass., reintroduced in March, though that proposal would have granted a base 30 percent credit.

Energy Department research

An aide with knowledge of the discussions, who wasn’t authorized to speak for the record, said House Democrats pushed for inclusion of the smart glass credit in the reconciliation package. The aide also pointed to Energy Department research showing the glass could generate significant emissions reductions from the building sector.

If all new and existing windows were upgraded to electrochromic glass, total energy use for U.S. buildings would fall by 10 percent and carbon dioxide emissions would drop 11 percent in 2030 compared with current projections, according to a memo from the National Renewable Energy Laboratory and Lawrence Berkeley National Laboratory. It cited a 2019 study saying the actively controlled glass had the highest potential for benefits to the electrical grid among technologies for a building’s exterior.

The memo also noted job benefits, saying several large electrochromic glass companies manufacture in the U.S. and rapid, broad adoption could lead to thousands of jobs installing the technology.

The Energy Department has funded electrochromic glass projects, including the development of options from View, which has a manufacturing facility in Olive Branch, Miss., and French-parented Sage Glass, which manufacturers in Fairbault, Minn.

Rep. Trent Kelly, R-Miss., represents the Olive Branch plant and is a co-sponsor of Horsford’s bill. Sen. Roger Wicker, R-Miss., is an original co-sponsor of Markey’s bill.

A Horsford aide cited the Energy Department findings and the technology’s ability to actively control window tints for heat and glare as reasons for incentivizing electrochromic glass adoption. A Markey aide pointed to similar benefits and the fact that the technology is often U.S.-made but needs to be more affordable to meet its potential for climate benefits.

Horsford, a member of the Ways and Means panel that drafted the clean energy tax provisions, represents much of the southern half of Nevada. While redistricting will adjust his district’s borders to pack in more Democratic voters, Horsford is still considered vulnerable enough to remain part of House Democrats’ Frontline program for 2022.

His staff tied his sponsorship of the bill to Nevada’s fast growth and corresponding increase in development and energy use; the state’s large real estate industry; Las Vegas’ fast-warming climate; and Horsford’s focus on good-paying union jobs, such as those in the building trades. Sen. Catherine Cortez Masto, D-Nev., another endangered incumbent, is a co-sponsor of the Senate version.

The bill, which had been floating around for years, is now more likely to pass as part of a bigger package. The larger budget bill is on hold over Sen. Joe Manchin III’s concerns, but as recently as Jan. 4 the West Virginia Democrat said he was on board with much of the clean energy tax section.

Pulling strings

Democrats’ support for the glass tax credit came as View ramped up its political efforts, beginning last spring as President Joe Biden was finalizing his budget proposal.

Capitol Tax Partners, a lobbying shop chock-full of Ways and Means, Senate Finance and Treasury Department veterans, registered to lobby on behalf of View in May. The company spent $40,000 lobbying on energy tax issues, including the electrochromic glass bill, from April through June and another $60,000 on the same plus the reconciliation bill from July through September, according to Senate lobbying records.

View had previously lobbied through another firm, including on the glass credit, and generally has spent $30,000 per quarter since first registering to lobby in 2014.

Also lobbying on the issue is Japan-based SoftBank, whose Vision Fund has backed major tech ventures and attracted scrutiny for the amount of money it has raised from Saudi Arabia. SoftBank put $1.1 billion into View in 2018 and listed the electrochromic glass bill among issues it lobbied on in the first three quarters of 2021.

View executives also recently began giving hefty sums to Democrats who could advance the credit, according to data from Opensecrets.org.

Company officials had given $52,500 as of October to House Ways and Means Chairman Richard E. Neal, D-Mass., making the relatively obscure firm his top donor for the 2022 cycle as of October. A Neal spokesperson didn’t respond to requests for comment. View officials wouldn’t comment on their donations and declined interview requests.

“Congressman Horsford is proud to have received contributions from thousands of donors who support his work to crush the coronavirus, get Nevada's economy back on track, and restore faith in our democracy and public institutions,” said Horsford spokeswoman Geneva Kropper. “Every contribution, no matter the size, funds a campaign that is focused on the people of Nevada's Fourth District.”

Horsford included a statement from View CEO Rao Malpuri in his March press release announcing introduction of his bill.

View officials also donated to key senators, giving $34,800 to Senate Majority Leader Charles E. Schumer and $21,000 to Senate Finance Chair Ron Wyden, D-Ore., in the spring and summer of 2021, according to Federal Election Commission filings.

The tax credits could come at a critical time for View, with the company facing delisting from the Nasdaq stock exchange for missing financial reports and skipping installation of new equipment at its Olive Branch site to conserve cash, Business Insider reported. View, which has made glass used in major airports, hospitals and office buildings across the country, saw its stock price fall 66 percent over the past 12 months.

Industry opposition

As the reconciliation bill lags because of disagreements among Democrats, at least one company in the industry is hoping to convince lawmakers to broaden the credit.

While electrochromic glass makes up the majority of the U.S. smart glass market, according to Grand View Research, an industry consulting firm, there are other varieties that can shift from clear to tinted. Not all block heat, and some are more commonly used to tint glass partitions in offices and car windows or for other purposes.

A startup working on a rival technology that applies a special film to existing windows, Crown Electrokinetics Corp., objected to Horsford and Markey’s bill in a blog post earlier this year.

Crown announced its first commercial customer in September and says its product is ideal for retrofitting existing windows, a cheaper and less invasive option than full window replacement. The thin film product, originally developed by HP Inc., can be powered by solar, unlike electrochromic glass. It wouldn’t qualify for credits under the reconciliation package.

Crown CEO Doug Croxall said in an interview that the budget bill provision amounts to politicians picking a winner in the industry rather than letting the market decide.

Corvallis, Ore.-based Crown, which also has a Los Angeles office, is hoping to make a case to area lawmakers in the coming weeks. That would include Wyden, who will manage any amendments to the tax package once it eventually hits the Senate floor.

“When someone is getting a benefit and others aren’t for no reason, other than that party pushed hard to get the benefit in Congress, it’s not a level playing field,” Croxall said.