A Republican tax bill unveiled on Thursday included cuts to
renewable energy tax credits considered critical to enabling wind projects to
compete with fossil fuel plants, but tax breaks for solar power were left
largely intact.
The credits, which receive broad bipartisan support, were
extended by Congress less than two years ago.
The wind industry decried the proposal, saying it put $50
billion in planned investment at risk, while the solar sector expressed relief
the bill mostly preserved the timeline laid out in 2015 for its primary tax
credit.
In the same legislation, Republicans proposed eliminating
the $7,500 tax credit for electric vehicles.
Greg Wetstone, president of the non-profit American Council
on Renewable Energy, said the move was “mystifying.”
“Wind has particularly been a boon in rural areas where
there aren’t a lot of economic choices,” Wetstone said, noting that wind had
strong support in the Senate, which has yet to weigh in on the bill.
Of major concern to wind developers, the legislation called
for a reduced credit for every kilowatt-hour of energy produced from wind
projects.
In 2015 and 2016, the credit was worth 2.4 cents, dropping
by 20 percent each year for projects that start construction from 2017 through
2019. In the proposed bill, that credit would drop to 1.5 cents per kwh. In
addition, projects must show that there is continuous construction in order to
claim the tax credit available on the day construction starts.
The provision would increase tax revenue by $12.3 billion
from 2018 to 2027, according to the bill summary.
In a statement, the American Wind Energy Association trade
group said investors and project developers had banked on the stability of the
policy enacted in 2015 in planning billions of dollars of investment in wind
energy.
“The House proposal would pull the rug out from under
100,000 U.S. wind workers and 500 American factories,” AWEA Chief Executive Tom
Kiernan said in a statement.
The solar industry’s main trade group, the Solar Energy
Industries Association, said it was encouraged that a tax credit worth 30
percent of the value of a solar project had been left mostly intact. Under
current law, that credit is scheduled to step down in value gradually until
2022, when it becomes a permanent 10 percent credit only for utility and
commercial projects.
The bill unveiled on Thursday would eliminate the 10 percent
tax credit, but not until after 2027.
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