The clean energy sector in the United States is booming. Decades of industry and federal government investment have led to staggering drops in the cost of utility-scale wind and solar energy. Not only does this lead to cleaner, cheaper energy across the United States—it also leads to more jobs. Both the wind and solar industries are creating jobs at 12 times the rate as the rest of the U.S. economy combined. However, on December 2nd, the Senate passed a tax bill that will have devastating impacts on the thriving wind and solar industries.
The base erosion anti-abuse tax (BEAT) approved by the Senate threatens the foundation of clean energy finance. Here’s how.
When a company or electric utility wants to lay out solar arrays or put up a wind turbine, it usually partners with a large financier to fund the project. In exchange for capital, the company or utility agrees to give the financier wind or solar tax credits it receives from the government. Here’s where the problem with BEAT comes in.
Through this BEAT provision, for every dollar amount saved by the financiers through the tax credits, the government could impose an equal amount of taxes— disincentivizing them from investing in wind and solar. This not only spells out a disaster for new projects, but also has a retroactive effect on older installments that are still receiving tax credits.
The passing of BEAT has already led to public opposition from solar, wind, and clean energy industry associations—institutions that recognize the funding of clean energy leads to a better environment and more jobs for the United States.
This week, as the House and Senate move to conference to set forth a unified tax bill, the eyes of the clean energy industry will be on how this provision fares. You can help by contacting your senators and telling them to support clean energy, clean energy jobs, and to stop the poison pill in the BEAT program that threatens our clean energy sector.