E&E News’ Energywire turned to McGuireWoods Austin partner Becky Diffen for analysis of how the 2017 Tax Act could affect the wind industry.
In a Dec. 19 story, “Booming Wind Industry Pauses to Weigh Tax Bill Impact,” Diffen told Energywire that uncertainty over the act’s renewable energy provisions affected deal activity in the final weeks of the year. “Nobody wanted to stop doing deals, but it slowed down the deals,” she said, as parties had to address potential tax reform issues without knowing exactly how the act would come out or when it would go into effect.
Energywire reported that the wind development pipeline remains filled with projects that began on-site construction or equipment procurement before the end of 2016 to qualify for the full federal production tax credit (PTC), which will be phased out by 2024. Diffen, who previously worked as a utility-scale wind power developer, said the PTC phase-out is working as intended.
This is the reason why the 2017 Tax Act “shook up the wind industry so much,” she said, explaining that the PTCs have been “a perfect success story on how subsidies are supposed to work."