E2 statement from executive director Bob Keefe
WASHINGTON (December 19, 2017) – Wednesday, the House is expected to complete passage of the final tax bill, sending the tax overhaul package to President Trump’s desk. While the final $1.5 trillion bill removes damaging language that would have repealed or weakened important clean energy incentives like the Production Tax Credit (PTC), Investment Tax Credit (ITC) and Electric Vehicle (EV) Tax Credit, negotiations failed to fully fix a provision that could seriously harm financing for large solar and wind projects.
“Congress made the correct decision to amend provisions that threatened to devastate thousands of current and future renewable energy projects,” said E2 (Environmental Entrepreneurs) executive director Bob Keefe. “But by passing a final tax bill that is still encouraging uncertainty in the clean energy sector, they are leaving their job very much undone. Congress must come back to the table – and soon – to ensure that the BEAT provisions can no longer have a harmful effect on these jobs-making projects.
The tax overhaul also opens the Arctic National Wildlife Refuge up for oil and gas drilling.
“Weighting the scales for fossil fuels over clean energy, which is adding jobs faster than the overall economy, is a disappointing addition by Washington,” added Keefe. “As long as tax breaks for fossil fuels continue to dwarf renewables seven to one, America’s clean energy future will remain uncertain and out of reach.”
In the end, the bill does not include the alternative minimum tax that would have taxed renewable projects heavily. However, despite efforts by many members of Congress to correct, the base erosion anti-abuse (BEAT) provisions that slipped into the Senate’s earlier version remained in the final bill passed by both chambers. A late repair to the provisions to help tax equity markets going into 2018 allows corporations to keep 80 percent of the ITC and PTC credit values.
“Even with an exemption, the BEAT provisions will continue to complicate and cause uncertainty across solar and wind markets and stop America from living up to its potential to pursue innovative technologies,” explained Keefe.
While a complete solution for the BEAT provisions failed before final passage, a more permanent fix for this issue is already being worked on as part of the “technical fixes” package that may be passed in the coming months as a complimentary bill. A tax extenders bill could also be introduced as early as this week, which would extend tax credits to other renewable technologies like geothermal and small hydropower.
“US businesses and workers shouldn’t have to hope for technical fixes and mistakes to be corrected this holiday season,” said Keefe. “Congressional leaders promised a pro-business bill and must get to work in the coming weeks and months to deliver that to the American people or risk taking our economy and environment backward in the New Year.”
Additional Resources:
- E2 Letter from 371 business leaders and investors to Congress urging support of federal clean energy tax provisions
- E2 Clean Energy Jobs Factsheet
- S. Labor Department’s Biennial Employment Projects 2016-2026
To speak with E2 members and business leaders in your community on this issue, please contact Michael Timberlake at (202) 289-2407 or [email protected].
###
Environmental Entrepreneurs (E2) is a national, nonpartisan group of business leaders, investors, and professionals from every sector of the economy who advocate for smart policies that are good for the economy and good for the environment. Our members have founded or funded more than 2,500 companies, created more than 600,000 jobs, and manage more than $100 billion in venture and private equity capital. For more information, see www.e2.org or follow us on Twitter at @e2org.