Tax Bill, if Passed, Spares Renewables, but Koch Congress can Keep US from Leadership

December 17, 2017

It would appear from the emerging tax legislation, as I showed in this video not too long ago,  – that even a congress hostile to science and generally in the pocket of the fossil fuel industry cannot block the momentum of the renewable revolution,  – although they can keep the US from leading it, and slow it down enough to cause enormous suffering and damages.

Too much progress and investment in the Red States of America’s heartland means that key legislators want to keep the jobs and revenue from renewable manufacturing and installation growing.

Reuters:

WASHINGTON (Reuters) – The U.S. renewable energy industry expressed relief after a compromise Republican tax bill released late on Friday preserved key tax credits that had been at risk of being removed, but it raised concerns about a provision that may threaten investment in the sector.

The final tax bill retains the production and investment tax credits for wind and solar energy that have spurred investment in the fast-growth industries. It also eliminates the alternative minimum tax, which would have reduced the value of those credits.

The bill includes the Base Erosion Anti-Abuse Tax, which was intended to prevent multinational companies from abusing the tax code but has worried the renewable energy industry because it would limit the ability to claim a portion of production or investment credits.

The conference bill made changes to a more severe Senate proposal by allowing the credits to offset up to 80 percent of the BEAT tax, but renewable energy industry representatives said they were uncertain how the marketplace would react.

The original Senate version could have chilled investment by international companies like Vestas Wind Systems A/S, and banks in the renewable energy sector, industry experts said.

“We are grateful for the elimination of provisions that would have decimated future renewable energy growth and even penalized past investment in wind and solar power, but we remain concerned about the potential impacts of the new BEAT (tax) on renewable energy finance,” said American Council on Renewable Energy President Gregory Wetstone.

Solar industry group SEIA called the tax bill a “great victory” for the sector and its 260,000 workers.

Advanced Energy Economy, a lobby group for clean energy, said it was relieved that the bill retained the tax credits but called it a “missed opportunity” to bolster other technologies, such as fuel cells, energy storage, combined heat and power, geothermal, nuclear, and distributed wind power.

CleanTechnica:

“House and Senate negotiators have agreed to spare the electric-vehicle tax credit and wind production tax credit in their compromise package, according to a Republican familiar with the process,” Bloomberg reported a couple of days ago. Considering how bill revisions go in general — but especially this smorgasbord of a mess, which has been dramatically hidden from the public and sprinted toward the doors — I wasn’t ready to count on anything until the deal is done and the ink is dry. However, there does seem to be a solid expectation that these cleantech tax credits will be retained.

Seconds ago, the US Solar Energy Industries Association (SEIA) put out the following statement, so I think it’s safe to presume those earlier rumors were correct:

windmanu
“After weeks of negotiations, the final tax legislation released today maintains the solar Investment Tax Credits (ITC) for both commercial developers and for homeowners in its current form. This is a great victory for the solar industry and its 260,000 American workers and we commend our bipartisan solar champions in Congress for their diligent efforts to maintain solar’s critical role in America’s economy.”

One question I now have is, who actually saved these tax credits?

Democrats have been completely blocked from the negotiations, as is evident by the “pay the rich and take from the middle class and poor further down the line” policies that Republicans are ramming through. Republicans in Congress aren’t even pretending to care about public dissatisfaction with the type of tax breaks and loopholes they are about to give to billionaires and multimillionaires. They are simply pushing through the wealth-shifting requests of the super rich people and corporations that fund their campaigns and allow them to stay in office. (Before you call me cynical, note that some Republican Congressmen admitted as much.)

So, was it really consumer pressure (and the lobbying work of superb cleantech advocacy arms like Plug In America, SEIA, and AWEA) that saved these tax credits? Perhaps the Republican senators and representatives were indeed scared of the wrath they might bring on themselves from unhappy constituents — after all, a lot of people are counting on tax credits for electric cars and rooftop solar. Perhaps these broad industry bodies somehow had some sway on Republicans policymakers.

However, I think it comes down to some other issues. Solar energy, wind energy, and electric vehicles have become big business in the United States (and elsewhere). Thousands of companies — big and small — benefit from these extremely fast growing industries. Some of these companies (and the organizations noted above) are raising significant awareness among the political class that they are creating jobs and economic benefits for their states and districts. In many cases, that may not be enough to get the vote of an anti-regulation, pollution-supporting Republican. However, in some states and districts, these industries are already a huge deal. To prematurely take away support is to attack some of the biggest employers and supporters in one’s jurisdiction.

In other words, the national industry associations and lobbyists may have significant sway, but it’s specifically because of the widespread, diverse, and locally influential cleantech companies that are now behind them. It’s primarily because many members of Congress know there are wind, solar, and EV companies in their jurisdictions creating jobs that would be slammed by a sudden policy change and would threaten these politicians’ own job security as a result.

 

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One Response to “Tax Bill, if Passed, Spares Renewables, but Koch Congress can Keep US from Leadership”

  1. indy222 Says:

    Studies show a strong correlation: Republicans have larger amygdala’s, in their brains (the fear-experiencing nexus), while Democrats/liberals have larger anterior cingulate cortex – which does error checking and dealing with complexity. I expect the kicking/and/screaming against a renewables future will continue from the I’m-So-Afraid rank-and-file Republicans out there. But for investors, that means a continual climb of the “wall of worry”, which can be profitable.


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