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House tax bill trims wind tax credit, extends nuclear provision

4 June 2018
Renewables
energynomics

Tax credits cherished by the wind and solar industry remain under a rewrite of the tax code revealed by House Republicans, but the tax overhaul bill would trim the wind energy’s production tax credit by more than a third.

The bill, unveiled by House GOP leaders Thursday, also extends an estimated $6 billion tax credit for the nuclear industry, which would benefit Southern Co. Without the extension, the credit may have gone unused before a 2021 deadline. Southern’s Vogtle project in Georgia faces construction delays and is not on track to be completed before the deadline.

The bill also adds tax credits for other energy sources, such as geothermal, small-scale wind and fuel cells that were left out of a 2015 budget and spending deal, according to Bloomberg.

The House tax overhaul would cut the wind industry’s 2.3-cent-per-kilowatt hour tax credit to 1.5 cents and also hardens a deadline for its phaseout — changes estimated by congressional analysts to cut more than $11 billion in benefits to the industry over the next decade.

“The proposal could represent a significant hit to the wind energy sector,” Kevin Book, managing director of Washington-based ClearView Energy Partners LLC, said in an email. The changes could cut 25 percent to 45 percent of the wind credit’s value over the next 10 years, he said.

Under the deal passed by Congress in 2015, the wind production tax credit begins phasing out this year before expiring in 2020. A separate, and unaffected, solar industry tax credit phases out before expiring in 2022. That will continue as planned, but a 10 percent tax credit for the solar industry that was supposed to be permanent for utility-scale and commercial projects would be ended by the bill after 2027, a move the solar industry vowed to fight.

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