GOP tax plan picks winners and losers in energy sector
The energy industry has winners and losers in the new House GOP tax bill. Losers are the electric car industry and producers of wind power and other clean energy.
Winners include oil and gas and the nuclear power industry, which would see tax breaks preserved.
The bill's release Thursday alarmed automobile manufacturers such as electric car maker Tesla, and environmentalists howled over the loss of tax credits for renewable energy production, which would produce billions of dollars to help pay for corporate tax cuts elsewhere in the measure.
"It's a dirty tax deal for dirty energy," said Jeff Tittel, Director of the New Jersey Sierra Club. "Trump's tax bill is a clear assault on renewable energy including wind, electric vehicles, and solar power. While keeping the bulk of tax credits for the oil and other fossil fuel industries, the bill would cut important credits for green fuels."
The measure would repeal a tax credit of up to $7,500 for plug-in electric vehicles such as the Tesla Model 3 and Chevrolet Bolt. Electric cars comprise just about 1 percent of sales nationwide, but several states have mandates that such "zero emission vehicles" make up a much larger portion of vehicle sales. Manufacturers worry that eliminating the lucrative tax credit would make meeting those targets virtually impossible.
The measure also would scale back a tax credit on wind energy that's popular with some Republicans, including powerful Iowa Sen. Charles Grassley, who promised to defend it.
The wind industry currently benefits from a 2.3 cent-per-kilowatt hours production credit; the measure would cut that back to 1.5 cents. The measure also ends the 10 percent tax credit for large-scale solar energy projects after 10 years and imposes a more aggressive timeline for solar projects to qualify for a 30 percent tax credit.
The GOP measure ends modest tax breaks for oil and gas, including a credit for low-producing oil and gas wells. But a lucrative tax break for drilling costs and special oil and gas industry accounting rules would be preserved, and a $6 billion tax break for nuclear power plant construction would be extended as well in a victory for a nuclear power plant project in Georgia by the Southern Company.
The president of the American Petroleum Institute, Jack Gerard, said the bill "took a bold step to modernize the nation's tax code to sustain U.S. economic growth, spur strong energy investment, and create American jobs."
Democrats objected to the measure, which also scales back a tax credit for homeowners who install solar panels on their residences. "We should just maybe figure out a way to burn coal in cars and that would make them happy," said a sarcastic Rep. Peter DeFazio, D-Ore.