Grid Modernization 2018 Summit will bring together regulators, utility leaders and key technology innovators to explore how to optimize grid investment to meet growing customer demands and operational needs…
Latest tax proposal fixes BEAT provision
Written By: Jen Neville
December 18, 2017
Republican senators released their final tax proposal on Dec. 15 which fixed the Base Erosion Anti-Abuse Tax (BEAT) provision.
The BEAT provision originally prevented renewable companies from monetizing investment tax credits (ITCs) and production tax credit (PTCs). Now, with the new tax proposal, renewable companies would be able to counteract 80 percent of the tax. Lawmakers would also be able to remove the alternative minimum tax (AMT), which could prevent research and development spending.
However, the latest provision could still potentially hurt wind generation. The latest BEAT is set to expire in 2025, but many wind projects last for over a decade, thus putting those projects at risk.
Since the proposal came out, there have been concerns about what it could mean for the renewable sector.
Gregory Wetstone, president and CEO of the American Council on Renewable Energy (ACORE), said in a statement:
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 Base Erosion Anti-Abuse Tax on renewable energy finance.
“It will take some time to assess the statutory language and determine how the financial institutions that invest in wind and solar power, and play a central role in allowing developers to utilize tax credits, will respond,” said Wetstone.
On the other hand, there are renewable leaders who are still hopeful.
“It’s one of these things where you can’t call it a win for clean energy, because renewable energy isn’t helped by this bill,” said Gregory Jenner, a tax attorney at Stoel Rives, told Green Tech Media. “But it is fair to say that they weren’t hurt nearly as bad as they could have been.”