Statement by Gregory Wetstone, President and CEO, American Council on Renewable Energy (ACORE)
Washington, D.C. Dec. 15, 2017 – "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 (BEAT) on renewable energy finance. Even as we recognize that important progress was made in the effort to repair those provisions, we also note that the repair does not cover the full duration of the wind production tax credit (PTC) and the applicability of the new tax was expanded by conferees.
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. Business tax credits, like those for wind and solar power, can now be used to offset up to 80 percent of the BEAT tax. But the 80 percent repair applies only through 2025, and therefore devalues the later years of the 10-year wind PTC. In addition, we are uncertain how the marketplace will react to the fact that more multi-national firms may now be covered by the BEAT, and tax credits may not all be usable in any given year.
We note that many tax equity investors are potentially subject to the BEAT tax and will only able to determine if they are covered under the complex formula in the new law once they have completed their year-end tax calculations. The revised bill lowers the threshold that triggers application of the new tax to multi-national companies. Originally, four percent of a company’s total allowable deductions could be associated with foreign activity. Now that figure is reduced to two percent for financial institutions and three percent for all others."
The American Council on Renewable Energy (ACORE) is a national non-profit organization leading the transition to a renewable energy economy. With hundreds of member companies from across the spectrum of renewable energy technologies, consumers and investors, ACORE is uniquely positioned to promote the policies and financial structures essential to growth in the renewable energy sector. Our annual forums in Washington, D.C., New York and San Francisco set the industry standard in providing important venues for key leaders to meet, discuss recent developments, and hear the latest from senior government officials and seasoned experts. For more information, visit the ACORE website and follow @ACORE on Twitter.
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