US House backs changes to wind, EV tax credits
Washington, 16 November (Argus) — The US House of Representatives today approved major tax legislation that would reduce or eliminate federal incentives for renewable energy and electric vehicles.
The House voted 227-205 to adopt a $1.5 trillion overhaul of federal tax policy, with 13 Republicans joining Democrats in opposing the bill. While the legislation focuses largely on items like corporate and personal income taxes, it would make significant revisions to the production tax credit (PTC) for wind and other renewables and repeal the federal credit for new electric vehicles.
House Republicans touted the bill's passage as step toward making the US tax code "simpler and fairer" for individual taxpayers and for business.
But wind and electric vehicle advocates warn the House changes could lead to significant disruptions for their industries and are hoping the Senate will not follow suit. The current version of the Senate bill leaves both incentives untouched. The Senate Finance Committee has been debating on the bill all week.
Wind industry officials say the House bill effectively scuttles a deal they agreed to in 2015 to phase out the PTC over five years.
"We support the goal of making America a better place to do business, and this retroactive rule change runs counter to that," American Wind Energy Association chief executive Tom Kiernan said.
The bill would pull the PTC back to its original value of 1.5¢/kWh by repealing an inflation adjustment that boosted the credit to 2.3¢/kWh last year. That lower value would serve as the basis for the ongoing phaseout of the incentive, which will drop by 20pc/yr through 2019. Any projects that start construction after today would get the lower rate.
The PTC now sits at 1.92¢/kWh for projects that started construction this year. That figure represents the 2.3¢/kWh value after the 20pc annual decline is applied.
The House tax bill would also change how the government determines if a project is eligible for the credit.
It would completely repeal the tax credit available to consumers who buy new plug-in electric vehicles. The incentive ranges from $2,500-$7,500 based on the size of the vehicle battery.
"With intense competition from China and other nations, it is critical that this vital incentive be retained to accelerate US job growth and economic competitiveness in electric drive technologies," said Genevieve Cullen, president of the Electric Drive Transportation Association, a trade group.