Major wind (and solar) power deals on hold while US politicians argue tax laws – $50 billion at risk

The US House of Representatives passed a tax-reform bill on Nov. 16 that would change the amount of tax credit each kWh of wind power created gets going forward. The US Senate, disagreeing, has returned a bill without this change.

While being argued, signed projects at various stages of development are on hold – and some estimate $50 billion worth of planned wind projects might not be developed.

The US solar industry is also being slowly bled while it waits on Trump’s ruling on the ‘Suniva Tax.’

The US House tax reform bill has suggested we lower the wind power credit from ~2.4¢/kWh to 1.5¢/kWh. Wind power sells at an average of 3.36¢/kWh in the USA. This tax change represents a 15% drop in value per kWh.

Technically, the adjustment being made is a removal of the upward adjustment for inflation from the calculation of the tax credit – and the 1.5¢/kWh value is a return to the originally defined value before inflation.

The Wind PTC was extended in 2015 as part of the trading between the parties involving the extension of the solar tax credit and allowing the USA to sell oil internationally. The PTC was already set to phase out in 2019.

Per GreenBiz, Microsoft – who just signed a $233 million deal for electricity from a European wind farm – is paying close attention:

“It’s something we’re keeping an eye on,” said Brian Janous, general manager of energy at Microsoft. “Talking to developers and players in the market, everyone is equally concerned because it would put quite a damper on development of wind power.”

A Dallas, Texas company – McCarthy Building Companies – said they’ve got a 100-megawatt, $100 million solar farm near Fort Stockton that has been put on “indefinite hold” awaiting Trump’s Suniva tax decision.

Recently, the US Bureau of Labor Statistics published a report suggesting that wind technicians and solar installers will be the highest growing jobs in the United States for the next ten years. As of early 2016, more Americans worked in solar power than the extraction of Oil & Gas, or Coal.

Electrek’s Take

The wind industry’s ‘Production Tax Credit’ (PTC) is much like the ‘Investment Tax Credit’ (ITC) that the solar industry gets – an amount of money, based upon clean energy production, to offset taxes owed to the federal government. Both of these tax structures are used as politically convenient replacements for a carbon tax. Voters seem much more interested in laser focused programs versus the broad monetary grab of a carbon tax. Research shows that a majority of Americans support a carbon tax and that 80% of them wish to apply the revenue to clean energy spending.

Techniques that slow down an industry by creating political, and thus business, uncertainty are well known politician attacks. Here on the site, we’ve talked about Scott Pruitt’s Don Quixote like attack on windmills at the behest of his coal and oil handlers. Currently, the nations body that regulates the power industry – as the result of a suggestion from a fake energy study pushed by the Department of Energy and Rick Perry earlier this year – is considering paying Coal and Nuclear power $10 billion in subsidies.

The higher up US political structure is seemingly suffering the paradoxical resource curse that has plagued the world for so long. With such amazing advances as floating wind power and the largest wind structures in the world happening within the last couple of months – it is irrational on all levels that we would attack such fundamental necessities for slowing our carbon emissions.

Call your Representative and let them know your opinion.

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