As Paris talks climate, U.S. leaders plot phaseout of renewable tax credits

Phase-out talk comes as Obama launches clean-energy research plan 

 

The solar investment tax credit could be extended under ongoing tax talks, but then phased out.

Lawmakers are discussing phasing out tax credits for renewable energy as part of a year-end deal to renew a raft of expired tax breaks.
House and Senate negotiators have been working to complete a deal on reviving the breaks, known as extenders. A person familiar with the talks said there have been no discussions since last weekend, however.
Negotiations have included extending the wind production tax credit for five years — but beginning to phase it out in 2017. Under a draft negotiating document, it would be phased out entirely by 2019.

Similarly, negotiators have discussed a phase-out for the solar investment tax credit, with timing to be determined. But first, the credit would be extended for either two or five years.
The potential moves by lawmakers come as President Barack Obama returns from the Paris climate talks. At the talks, Obama and Microsoft co-founder Bill Gates launched a multi-billion-dollar initiative to accelerate clean-energy research and development, as part of global efforts to combat climate change.
Analyst Chris Krueger of Guggenheim Partners said in a commentary on Tuesday that solar companies like First Solar FSLR, +2.56%   and SunPower SPWR, +4.22%   would be among the biggest industry winners from a deal on extenders. The deal could also include a permanent research-and-development credit and some tax benefits for low-income workers.
A spokesman for the Solar Energy Industries Association did not comment directly on either the potential extension or phase out of the solar credit, which applies to residential and commercial properties.
“The solar investment tax credit has been critical to the growth of the solar industry and it will continue to be critical,” said SEIA spokesman Dan Whitten. “We continue to work with members of Congress in both parties to make sure that policies put into place seize upon the vast opportunities solar energy offers to grow the economy, create American jobs and improve the environment.” He said nearly 200,000 Americans are employed at 8,000 solar companies.
The American Wind Energy Association has urged Congress to extend the wind credit for “the longest practical term.”
The association has also said a phase-out of “sufficient length and design” is something that could work for the industry.