I am on my way to San Francisco for a few great interviews. Always good to travel into the center of the solar industry universe.
Tax Reform Explained. The tax reform bill is in conference committee and no one really knows what will come out of this step. Whatever has been voted on can get completely rewritten and come out looking different. But the core pieces will get put into the final version that goes to both houses to vote on. Last week, at SolarWakeup Live! DC, I sat down with tax lawyer, Greg Jenner, and project finance lawyer, Audrey Louison, to go through the main provisions. The entire interview is available in podcast or video format. If this interview feels different than what you typically get at a solar conference it’s because I come at it from your side of the table. I have to make the same business decisions based on political and regulatory issues that you do and know what information I need to make that decision. My interviews come from a different perspective to drive information to you, not to fluff up the news. Hope you enjoy it.
BEAT Provision. In the interview you’ll find my discussion with Greg Jenner about the BEAT provision and he explains why BEAT, or some version of it, needs to be in the bill. Think of it as a way to stop companies from parking cash abroad. The House version uses a more piecemeal approach but in my conversation with multiple sources of tax equity, they seem to be unaffected thus far. That being said, the rules aren’t final and as Greg said, they have to do some form of BEAT. Don’t expect it to go away.
Corporate AMT. It was thrown back into the Senate version at the last minute. It’s causing a stir with donors/lobbyists and it’s going to be taken out and ‘fixed’.
Rates. Probably the most overlooked part of the bill and the most obvious is the impact of lower rates on the tax equity market. First, less tax liability means less tax equity supply. Second, lower rates means that depreciation is worth less and your projects will have to be repriced with the new rates in mind. All of these issues could cause contractual problems which we also discuss in the interview under the ‘change in law’ provisions of your agreements.
Will It Pass. Yes, says Greg Jenner. I tend to agree that it has to pass because as more political folks have called it, the ‘donor relief act of 2017’ is a political must have for the GOP. Let’s see where it goes from here, because in DC nothing is ever certain (except that SolarWakeup Live! DC will always get you the info you want to hear).
Don’t Miss. A great highlight of the power the utilities have pushed at the State legislature level across the South, harmful to consumers and hopefully the end of the monopoly system. A single city aims to be all EV mass transit in China. McIntyre takes over as chairman and promptly delays the NOPR decision by 30 days. As Phoenix files for insolvency, I want to talk about the downstream pains in solar in more detail this week.
SolarWakeup Live! New York. Tickets going on sale shortly but book your day to join us in New York on January 31st. The first 50 tickets will be 50% off, so get them quickly. If you are interested in sponsoring, hit reply to this email and I will get you more info.
- SolarWakeup Live! DC: Tax Reform Bill Explained by DC Lawyers from Stoel Rives and Mintz Levin
- The Post and Courier: How utilities across the U.S. changed the rules to make big bets with your money
- Bloomberg: China Goes All In on the Transit Revolution
- Reuters: New U.S. energy agency head gets time to decide on coal, nuclear rule
- PV-Tech: Phoenix Solar to start insolvency proceedings
- Washington Examiner: EPA’s Scott Pruitt plans to replace, not kill, Obama’s Clean Power Plan
- New York Times: The Trump Administration’s Coal Bailout
- Renewable Energy World: The Energy Imbalance Market is a Billion Dollar Opportunity
Opinion
Have a great day!
Yann