“The Senate bill should serve as the PTC/ITC blueprint for the final bill…. [Such reform] is an important step, but only first step, toward a level-playing-field between electrical energies that will, longer term, improve grid reliability coast-to-coast, border-to-border.”
After 25-years of subsidy-driven financing, the wind industry is entirely reliant on tax-equity investors, willing to accept tax credits in return for funding a significant percentage of their project costs. Tax equity now accounts for up to 60% of the capital needed to construct a typical wind facility. The pool of investors with enough passive income to qualify for wind PTCs is limited and includes the largest financial institutions such as JP Morgan, Bank of American, Citi and even Google.
Said bluntly, Main Street Americans are coughing up billions annually to help the richest Wall Street bankers avoid paying their taxes.…
The IRS flouted Congressional intent …and knowingly transformed the PTC phase-out into a 5-year PTC extension. Without reform, the PTC tax will grow to an additional $32+ billion in the next decade, not including the credits awarded projects already operating.
The multi-national, multi-billion-dollar wind industry and its group-think sycophants in the media blew a collective gasket this month following approval of the U.S. House tax bill (HR 1). It seems that House lawmakers shrugged off 25-years of subsidy lore by daring to rein in the open-ended, unlimited wind-PTC tax that now costs Americans over $5 billion annually. [1]
The House was right to take aim at the wind PTC, and the Senate should follow suit.
Ignoring Congressional Intent
The provision of HR 1 causing the biggest uproar is the “Special Rule for Determination of Beginning of Construction,” which clarifies when a project is considered to have started construction. …
“Big wind’s complaint that the language reneges on a previous deal is entirely unfounded. The so-called ‘deal’ AWEA is trying to preserve … was a backroom negotiation between big wind and Obama-era IRS lawyers to craft guidance that went well beyond the statute. Congress is finally taking corrective action.”
“According to the Joint Committee on Taxation, the GOP bill will save taxpayers $12.3 billion in PTC-subsidies over 2018-2027. … [T]he GOP tax bill is headed in the right direction on wind energy development. But if the goal was to simplify tax legislation, the GOP should go further and repeal the PTC altogether.”
The GOP tax bill dropped last Thursday and it sent shock waves through the wind industry. Turbine makers Vestas and Siemens saw notable declines in stock value and the American Wind Energy Association (AWEA) blasted Republicans for reneging on a “tax reform deal” already in place.…