Renewable energy developers believed to have dodged a bullet in the Senate’s tax reform bill face newfound concerns as the upper chamber works toward expected final passage this week. While the Senate bill preserves important Production Tax Credits (PTCs) that had been significantly rolled back in the House, it also contains a provision which would severely undercut the value of tax equity credits relied upon by institutional investors to justify upfront investments in wind and solar projects. Leading wind and solar trade associations worry that the provision, written to apply both retroactively and prospectively, would cause the tax equity market to collapse and dry up further investment in renewable projects.
As the Senate works at breakneck speed to wrap up consideration of its bill this evening, Iowa Senator Charles Grassley or other renewable energy backers may try to include a renewables exception in Senate Finance Chairman Orrin Hatch’s catch-all Manager’s Amendment. The likelier scenario, however, is that the House and Senate will wrangle over this provision during Conference Committee consideration of the bill.