How the US tax changes affect transactions

How the US tax changes affect transactions

December 01, 2017 | By Keith Martin in Washington, DC

At least a dozen provisions in a massive tax-cut bill that cleared the US Congress in mid-December will affect transactions in the power and broader infrastructure markets.

Tax credits

The existing tax credits for renewable energy remain unchanged.

The House had voted to make it tougher for renewable energy projects to be considered under construction in time to qualify for tax credits. The final bill leaves in place the existing phase-out schedules for tax credits and the existing Internal Revenue Service policies on what it means to start construction.

The House wanted to roll back production tax credits for wind projects to the 1992 level of $15 a megawatt hour and not to adjust the credit amount for future inflation. The change would have applied to projects that start construction in the future.

The House also wanted to eliminate a permanent 10% investment tax credit for solar and geothermal projects after 2027.

None of these provisions made it into the final bill.

Tax credits for “orphan” technologies — fuel cells