Unlike the House tax reform bill, the newly proposed Senate tax reform plan honors the terms of the phase-out of the wind energy production tax credit (PTC), according to the American Wind Energy Association (AWEA).
According to AWEA, as of press time, the Senate’s tax reform plan rejects the House bill’s drastic changes to the 2015 PTC phase-down, including retroactive rule changes that put at risk tens of thousands of jobs and at least $50 billion of investment tied to projects already under construction and nearly complete. The group says the Senate tax plan also leaves in place the 2015 terms for the wind investment tax credit, an investment tool favored by offshore wind developers.
The proposal was released on Friday as a conceptual mark by Senate Finance Committee Chairman Orrin Hatch, R-Utah. The committee will begin to mark up the proposal today.
AWEA says the House tax bill is already sending shock waves throughout the market. Bloomberg New Energy Finance and Goldman Sachs project new wind projects could be cut by more than half if the House language becomes law – also costing the jobs needed to build them and manufacture the 8,000 parts in a wind turbine. (More details on the potential effects of the House Republicans’ tax reform can be found here.)
The group points out that the PTC has been used to enable tens of billions in capital investment in rural America and to support tens of thousands of manufacturing and construction jobs spanning all 50 states.
“The Senate tax reform bill keeps a promise to America’s more than 100,000 wind energy workers and restores the confidence of businesses pouring billions of dollars into rural America,” says Tom Kiernan, CEO of AWEA. “For a rapidly growing number of Americans, including our nation’s veterans, wind power means well-paying, stable jobs. Fortunately for Americans, the Senate language honors Congress’ commitment to these workers, and Senators Grassley, Thune, Heller and others are speaking out against retroactive tax hikes proposed in House tax legislation.”
AWEA says the impact of the House’s retroactive tax hike on the wind industry creates uncertainty for all industries. If Congress can arbitrarily retroactively change the rules, any business is forced to think twice before inking a deal to invest billions in U.S. infrastructure. Undermining infrastructure investment, including wind farms, hurts rural communities seeking to harness their resources as a source of jobs and drought-resistant income, the group adds.
“The Senate has shown leadership in putting together a tax plan that works for U.S. wind workers, rural communities and consumers who want affordable, reliable wind energy – but the fight to preserve America’s wind jobs isn’t over,” says Kiernan.