Wind developers in Oklahoma and across the rest of the country might not fully embrace the tax reform plan passed over the weekend by the U.S. Senate.
That’s because it would reduce the number of years that developers were allowed to claim the wind production tax credit, according to a report by E and E News.
The head of one trade group calls it a “bad precedent.” Dylan Reed is head of congressional affairs at Advanced energy Economy and said, “You pass laws; businesses go out and spend based on those laws. And then five years later, congress goes back and changes that law and undermines the market.”
Sounds very much like what happened in Oklahoma when the legislature in the past year decided to eliminate tax credits it had originally given the wind industry in order to attract it to the state.
Under what the Republicans wrote in the bill,the credits would be paid out over ten years and the amount of time that wind developers can claim a tax credit will be reduced by six years.
Nationally, the production tax credit on wind projects is 2.3 cents per kilowatt-hour. The credit will eventually phase out by 2020.
Further, most of the projects built in the U.S. are reported to be supported by tax equity investment.
“I think we will see some investors drop out because they think they’ll be subject to the tax given the structure of their operations,” said Elias Hinckley, an energy and tax attorney at law firm K and L Gates LLP. “There will be others that take a wait-and-see approach.”
