When both houses of Congress introduced their tax reform bills both the wind and solar industries were concerned over provisions in the bills that would have impacted the rebates and incentives they currently experience. As the bill comes closer to reconciliation and potentially passing, however, the provisions that could have raised prices on renewable energy causing 10s of thousands of lost jobs, were largely removed.
Following the renewables industry’s hard fought battle in 2015 to gain extension of the Investment Tax Credit to support (ITC) solar power and the Production Tax Credit (PTC) to support wind power, the original tax bills would have essentially negated the impacts those incentives would have had on the industries. Meanwhile the incentives for fossil fuel-powered plants would have remained in place, skewing energy development in their favor. But the reconciliation bill taking shape helps ensure those incentives will work as expected.
“SEIA appreciates the hard work of our solar champions in Congress to ensure that the tax reform bill maintains the ITC in its current form,” said Abigail Ross Hopper, CEO of the Solar Energy Industries Association (SEIA). “In particular, the final bill preserves the current ramp down of the ITC through the end of 2021, maintains the 10 percent ITC for commercial developers beyond 2021, and allows the Treasury Department to issue guidance on commence construction eligibility criteria.”
In the original House bill the PTC would not have the expected draw-down period agreed to when it was extended in 2015. It would drastically reduced the PTC overnight, rather than over five years.
“We are grateful to our champions in Congress for their work to craft a pro-business tax reform bill that will continue the success story of American wind power,” said Tom Kiernan, CEO of the American Wind Energy Association. “The bill respects the 2015 bipartisan phase-out, preserving through 2019 the Production Tax Credit and Investment Tax Credit, which the wind industry uses to access capital and invest in US infrastructure.”
Both the solar and wind industries would have been impacted Base Erosion Anti-Abuse Tax [BEAT] provisions in the Senate bill as well. A group of renewable energy industry advocates challenged the Senate’s BEAT provisions, stating that BEAT would subject renewable energy to a new, 100 percent tax, while incentives for fossil fuels, some of which are more than 100 years old would have remained untouched.
However, Hopper stated: “The conference report changed the new Base Erosion Anti-Abuse Tax [BEAT] to allow the Investment Tax Credit to be used by solar investors. Given the complexities of the BEAT, we look forward to working with our congressional allies to modify the provision to allow unused tax credits to be used in future tax years.”
“We deeply appreciate the work of Members of Congress who stood up for wind workers and rural America, and look forward to continuing our work with these Congressional champions as we deliver more factory orders, construction contracts, and jobs,” Kiernan added.Tweet