BPA, ABC ask for parity in tax reform package

By Erin Voegele | November 10, 2017

The Biomass Power Association and American Biogas Council recently partnered with the Energy Recovery Council and National Hydropower Association to ask Congress for tax parity for all renewable technologies in tax reform.

On Nov. 7, the four trade groups sent a letter to Rep. Kevin Brady, chairman of the House Committee on Ways and Means and Sen. Orrin Hatch, chairman of the Senate Committee on Finance, asking them to provide parity and a level playing field for all renewable energy technologies as they craft tax reform legislation.

In the letter, the groups note that the Section 48 investment tax credit for solar technology was extended in 2015. That credit phases out through 2021. The Tax Cuts and Jobs Act currently being considered by the House Committee on Ways and Means would offer the same extension to fiber-optic solar, fuel cells, and small wind. The bill, however, fails to provide equal treatment for hydropower, biomass power, waste-to-energy and biogas.

“Baseload renewable technologies previously qualified for the Section 45 production tax credit (PTC) at a one-half credit rate, and the PTC for baseload technologies lapsed on December 31, 2016,” wrote the groups. “To provide parity in tax policy and energy markets, baseload renewable energy technologies should be made eligible for the same tax treatment that is afforded solar technology under the current law ITC and other Section 48 technologies under H.R. 1.”

The letter stresses that disparity in treatment places hydropower, biomass, waste-to-energy and biogas technologies at a significant competitive economic disadvantage, particularly in the eyes of investors who are seeking certainty with respect to tax incentives.

“We encourage you to support federal policies that provide parity for our technologies, which will leverage significant private investment and promote job creation and local economic benefits across the nation,” the groups said. “Congress should not be in the business of choosing winners and losers among renewable technologies. Tax reform provides an opportunity to address this issue and enact tax policy that puts all renewables electricity technologies on a level playing field. Providing baseload renewable technologies the same tax treatment that the House bill extends to the non-solar Section 48 technologies is the solution.”