The IRS on Friday issued new rules that
would restrict the ability of wind and solar companies to claim federal tax
breaks, a move that could hinder a number of renewable energy projects under development.
President Donald Trump’s domestic policy
bill, which was signed into law July 4, was already set to rapidly phase out(分階段停止使用to remove or stop
using something gradually or in stages) lucrative(賺錢的，營利的(especially of a business, job, or activity) producing a lot
of money) tax credits for new wind and solar farms
unless they began construction in the next 12 months. The new IRS guidance would
add further hurdles by tightening long-standing rules for what counts as the “beginning
of construction,” which will make it harder for some projects to qualify.
Previously, a wind or solar farm could count as(to be considered to be something or to be the same
as something:) having begun construction if the developer spent at least
5% of the project cost, which some companies did by purchasing electrical
transformers or other large equipment ahead of time. The developer could then
claim any tax breaks that were in effect that year, as long as it finished
construction within the next four years.
The new IRS guidance eliminates this
so-called “5% safe harbor” rule for large wind and solar farms, although it
keeps it in place (If something is in place, it is
in its usual or correct position:) for rooftop solar projects and
other smaller solar installations. Developers will still have the option of
beginning physical work on a project in order to qualify as having begun
construction.
The new restrictions appeared to be less
severe than many companies had expected, some experts said. But renewable
energy industry groups still criticized the move, which comes as the Trump
administration has imposed an array of obstacles for wind and solar projects
across the country.
The new tax guidance has its origins in the
debate over Trump’s domestic policy legislation.
While nearly all Republicans voted to end
Biden-era tax credits for wind and solar power as part of that bill, some
senators successfully pushed for a slightly slower phaseout of the credits in
order to limit industry disruption. That angered House conservatives, who had
wanted an immediate termination of the subsidies.
Trump issued an executive order shortly
after the bill passed, directing the Treasury Department to limit the ability
of wind and solar projects to qualify for the fast-disappearing tax credits.
The removal of federal subsidies means that the amounts of new wind energy and solar energy added in the United States over the next five years are expected to be 50% lower and 23% lower than previously projected, according to BloombergNEF. (Brad Plumer)
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