Blue Energy Group, a leading national tax and engineering firm, closely monitors activity and developments related to energy tax incentives. This newsletter is to inform you of updates and their impact so you can confidently prepare for your next energy efficiency or renewable energy project.
UPDATES
In a public letter dated March 9th that was released March 10th and signed by 21 House Republicans reiterated support for President Trump’s energy policy but indicated that changes in the tax code should not include cuts to the energy incentives found in the Inflation Reduction Act. The letter, addressed to the Chairman of the House Ways and Means Committee, Jason Smith, concluded by saying, “We request that any proposed changes to the tax code be conducted in a targeted and pragmatic fashion that promotes conference priorities without undoing current and future private sector investments which will continue to increase domestic manufacturing, promote energy innovation, and keep utility costs down.”
The letter was shared exclusively with POLITICO (subscription required). Link to letter.
IMPACT
The House Ways and Means Committee will likely start meeting this week to draft the budget bill legislation. The GOP aims to complete the reconciliation bill by Memorial Day, which means that we should have clarity by then on exactly what will be eliminated from the IRA, if anything. Given the fact that the GOP only has a four-vote majority in the house, a defection of 21 Republicans would kill any bill brought to a vote. It seems at this point that our expectation of what the bill may include would be very targeted cuts to provisions in the IRA but certainly not wholesale changes.
View POLITICO article: House Republican support grows for keeping clean energy tax breaks
GUIDANCE
(Provided by CEO Josh Howes)
As we have suggested in the past, any changes to the IRA will likely have a future start date since Congress typically won’t make funding cuts retroactive. It is best to get current projects under construction sooner rather than later to give yourself the best chance to avoid any cuts to current tax incentives.
Additionally, we’ve observed tax credits consistently being paid out without delay. We haven’t seen any interruptions thus far—everything appears to be proceeding as expected.