GOP Tax Scam Attacks Renewables While Nurturing Nuclear and Fossil Fuel Industries
Republican lawmakers propose drilling for oil on protected lands, offering tax cuts to gas companies, and funding nuclear reactors while slashing tax credits for wind and solar companies
Several provisions in the GOP tax plan threaten the future of renewable energy in the United States while bolstering support for nuclear reactors and the fossil fuel industry, according to a New York Times analysis.
Despite the recent boom in electrical generation from wind and solar—which soared to a record 10 percent of the nation's total generation in June—and the fact that the solar industry alone employs more Americans that coal, gas, and oil sectors combined, both the House and Senate versions of the Republican tax plan propose altering the conditions that have enabled the U.S. renewable industry to blossom.
"In different ways, direct and indirect, the House and Senate bills each imperil elements of" renewable energy's rise, Brad Plumer and Jim Tankersley write for the Times. The two bills will undergo a reconcilation process with the intention of sending a final version to the president's desk before the new year.
During the conference panel to finalize the bill, lawmakers will review the multiple measures expected to curtail U.S. renewable energy production, as the Times details:
A Senate bill provision intended to stop multinational companies from shifting profits overseas could unexpectedly cripple a key financing tool used by the renewable energy industry, particularly solar, by eroding the value of tax credits that banks and other financial institutions buy from energy companies.
The House bill's effects would be more direct, rolling back tax credits for wind farms and electric vehicles, while increasing federal support for two nuclear reactors under construction in Georgia....
The wind industry has warned that the House language, which would reduce the wind tax credit to 1.5 cents per kilowatt-hour, from 2.4 cents, and change eligibility rules, could eliminate over half of the new wind farms planned in the United States.
Amy Grace, a renewables analyst at Bloomberg New Energy Finance, told the Times that "in the long run, we think wind and solar will become cheap enough to compete without subsidies.... but in the short term, those tax credits have been important."
Although the Senate bill would not cut the vital tax credits for wind and solar, the Senate's Base Erosion Anti-Abuse Tax—which aims to stop companies from shifting profits abroad—would impose restrictions on renewable energy companies that sell credits to banks and investors, cutting off the companies from vital financing, thereby jeopardizing wind and solar farms nationwide.
The fossil fuel industry, meanwhile, is "under little pressure in either bill;" in fact, producers of oil and gas are expected to benefit from the final bill. Despite widespread protests, Sen. Lisa Murkowski (R-Alaska) has led an effort to require the federal governent to permit drilling for oil in the Arctic National Wildlife Refuge in Alaska, and an amendment by Sen. John Cornyn (R-Texas) essentially proposes lowering the tax rates on oil and gas companies' profits.
As the Huffington Post explained in a report published earlier this week, Cornyn's amendment takes a cue from the Republican leaders' goal of drastically reducing the corporate tax rate, and would lower the rate for a specific type of business model that is subject to "pass-through" taxation and is often utilized by the fossil fuel industry.
Gregg Polsky, a tax professor at the University of Georgia School of Law, likened the dirty energy industry handouts to the time Oprah Winfrey famously gave new cars to her entire audience. "It's like Oprah for big business," he said. "You get a car, you get a car, everybody gets a car!"