Current:Home > NewsTax Overhaul Preserves Critical Credits for Wind, Solar and Electric Vehicles-LoTradeCoin
Tax Overhaul Preserves Critical Credits for Wind, Solar and Electric Vehicles
View Date:2024-12-23 16:17:49
This story was updated Dec. 22 with President Trump signing the tax bill.
The booming renewable energy industry breathed a wary sigh of relief as Congress voted this week on a sweeping tax bill that ended up preserving critical tax credits for wind energy, solar power and electric vehicles, though the industry still has serious concerns about other parts of the bill.
As lawmakers worked over the past week to resolve issues between the House and Senate versions of the bill, the clean energy industry kept a keen eye out for details of the legislation, including provisions from the original House bill that would have weakened or eliminated the tax credits for renewables.
By rejecting that approach, Republicans sent a message that they won’t back attempts to kneecap ongoing growth in renewables, despite pressure from the oil and gas industry to scale back incentives for clean energy. The credits have stoked growth in wind and solar, which for the first time this year provided 10 percent of the country’s electricity, while jobs in clean energy are among the fastest growing in the country.
With costs for solar and wind generation continuing to plummet, along with the costs of large-scale batteries for energy storage, the industry appears poised for further growth.
Even as the tax bill maintained the status quo for clean energy, however, it handed a major victory to the oil and gas industries, thanks to an unrelated provision that allows drilling in part of the Arctic National Wildlife Refuge—a longtime goal of many Republicans and pushed by Sen. Lisa Murkowksi of Alaska.
The bill, signed by President Trump on Friday, maintained the production and investment tax credits for wind and solar, phasing them out according to a timeline agreed to by Congress in 2015. The final version also removed the alternative minimum tax, which would have lowered the value of wind and solar credits.
“I think it’s fair to say they weren’t included in the final Senate bill because wind and solar energy enjoys strong bipartisan support, particularly in rural areas, due to their important role as a jobs and economic driver,” said Gil Jenkins, a spokesman for the American Council on Renewable Energy.
Two members of the group reconciling the House and Senate versions have been particularly supportive of renewables, Sen. Rob Portman (R-Ohio) and Sen. John Thune (R-S.D.).
Still, the industry has a serious concern about a provision that threatens a key funding source for renewables.
While the Senate version of the bill was largely favorable to clean energy, it included a provision called the Base Erosion Anti-Abuse Tax (BEAT) that’s intended to prevent corporations from making payments to overseas subsidiaries in an effort to reduce their tax liability. The provision would ultimately discourage some companies from using wind and solar tax credits to cut their tax bills, which could, in turn, discourage banks from financing renewable projects. The industry said the provision threatened up to $12 billion in financing.
The final version of the bill allows the credits to offset 80 percent of the BEAT tax, which the clean energy industry says is an improvement but still a concern.
“Under the revised bill, the ability to use business credits, including those for wind and solar power, to offset 80 percent of the BEAT tax ends after the year 2025,” Jenkins explained. “This is an immediate concern for recently completed wind projects, which receive production tax credits for ten years from the date they are placed in service. New wind projects have the option of selecting a single-year investment tax credit, but that too will involve a loss in value.”
But, overall, the industry is expressing relief.
“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,” Tom Kiernan, CEO of the American Wind Energy Association, said in a statement. “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.”
The House passed the tax bill 224-201 on Dec. 20, with 12 Republicans opposed and no Democrats supporting the bill. The Senate voted 51-48, strictly along party lines. President Trump signed the bill on Dec. 22.
Read more about the provision allowing drilling in the Arctic National Wildlife Refuge
veryGood! (223)
Related
- Why Amanda Seyfried Traded Living in Hollywood for Life on a Farm in Upstate New York
- Rudy Giuliani files for bankruptcy following $146 million defamation suit judgment
- Reducing Methane From Livestock Is Critical for Stabilizing the Climate, but Congress Continues to Block Farms From Reporting Emissions Anyway
- At least 5 US-funded projects in Gaza are damaged or destroyed, but most are spared
- Let Demi Moore’s Iconic Fashion Give You More Inspiration
- Tape reveals Donald Trump pressured Michigan officials not to certify 2020 vote, a new report says
- Connecticut police dog killed in shooting after state troopers tried to serve an arrest warrant
- The Impact of Restrictive Abortion Laws in 2023
- Halle Berry Rocks Sheer Dress She Wore to 2002 Oscars 22 Years Later
- Former NFL player Mike Williams died of dental-related sepsis, medical examiner says
Ranking
- Republican Rep. Juan Ciscomani wins reelection to Arizona US House seat
- Rudy Giuliani files for bankruptcy following $146 million defamation suit judgment
- Exclusive: Sia crowns Katurah Topps as her favorite 'Survivor' after the season 45 finale
- China drafts new rules proposing restrictions on online gaming
- Halle Berry surprises crowd in iconic 2002 Elie Saab gown from her historic Oscar win
- As the Israel-Hamas war rages, medical mercy flights give some of Gaza's most vulnerable a chance at survival
- China drafts new rules proposing restrictions on online gaming
- Powerball winning numbers for Wednesday's $572 million jackpot: Check your tickets
Recommendation
-
Tuskegee University closes its campus to the public, fires security chief after shooting
-
Prized pitcher Yoshinobu Yamamoto agrees with Dodgers on $325 million deal, according to reports
-
California lawsuit says Ralphs broke the law by asking job-seekers about their criminal histories
-
Tesla moves forward with a plan to build an energy-storage battery factory in China
-
Trump on Day 1: Begin deportation push, pardon Jan. 6 rioters and make his criminal cases vanish
-
Biden administration unveils hydrogen tax credit plan to jump-start industry
-
Dispute over criminal jurisdiction flares in Oklahoma between tribal police, jailers
-
A British sea monitoring agency says another vessel has been hijacked near Somalia