GOP Tax Bill Seeks To Take The Wind Out Of Renewable Energy’s Sails

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Fossil fuels and nuclear energy are either untouched or bolstered by the bills, but solar and wind take a serious hit.

Both versions of GOP tax bills appear damaging to the U.S. renewable energy sector, making use of provisions that curtail incentives for wind and solar energy but shoring up the fossil fuel industries. If the final iteration of the tax bill includes measures from either or both versions, renewable energy will struggle significantly.

In different ways, direct and indirect, the House and Senate bills each imperil elements of that ascension. A Senate bill provision intended to stop multinational companies from shifting profits overseas could unexpectedly cripple a key financing tool used by the renewable energy industry, particularly solar, by eroding the value of tax credits that banks and other financial institutions buy from energy companies.

The House bill would eliminate tax credits for renewables but increase federal funding for two nuclear power plants in Georgia.

Fossil fuel producers are under little pressure in either bill and some would stand to benefit: The Senate legislation would open the Arctic National Wildlife Refuge in Alaska to oil drilling, while a last-minute amendment added by Senator John Cornyn, Republican of Texas, would allow oil and gas companies to receive lower tax rates on their profits.

Michael Goggin, the senior director of research at the American Wind Energy Association, said the projects are already struggling to get financing, adding that "even the threat of this bill is having a chilling effect." Still, as the Times notes,

No one is predicting the demise of solar and wind deployment, which rely less each year on tax subsidies as their costs decline and were already preparing for a gradual phaseout of the subsidies by 2020. But the sudden changes could slow what had been a steady pace of adoption and raise electricity prices for consumers in states like California, which have set mandatory targets for the share of renewables in their electricity mixes. In states without such targets, including Texas, more expensive new renewable plants could lose out to natural gas generation.