Republican tax plans seeking to cut clean energy subsidies include provisions that could end incentives even earlier than proposed.
Less known restrictions in legislation would disqualify companies, which would disqualify them from claiming critical tax credits if they use parts, “sub-assemblies” or key minerals imported from foreign entities such as China, Russia and North Korea. Since most of the U.S. solar and battery industries rely on materials from China, key manufacturing credits will be unusable until the official sunset date. The new rules also apply to credit for nuclear, carbon capture, geothermal, heat pumps and biofuels.
EDP Renewables North America CEO Sandhya Ganapathy said the move would constitute a “complete death” of energy projects relying on complex, global supply chains.
The legislation aims to fund President Donald Trump’s tax cuts to reduce spending $560 billion, spending energy tax credits from President Joe Biden’s climate law and plans to vote before the Memorial Day break next weekend. If passed, the legislation will go to the Senate, which Republicans plan to amend.
Read: Senate Republicans crack down on energy tax cuts in House plan
Evercore Group LLC wrote in a research note.
Jesse Jenkins, assistant professor at Princeton University, said the IRS, under the Trump administration, may not rush to issue such rules to explain how to comply with the law.
“That alone can be the kiss of death for these projects,” Jenkins said in an interview. “It would be devastating for the creation of the Renaissance we’ve seen.”
With the assistance of Mark Chediak.
This article was generated from the Automation News Agency feed without the text being modified.
