New U.S. tax bill creates levelled playing-field for geothermal energy
While hitting the wind and solar industries hard, the new tax reform bill in the U.S. could benefit geothermal, with reinstating a 30% Investment Tax Credit creating a levelled playing field for geothermal developers.
With news from the U.S. on the approval of the U.S. Senate on a tax bill, details emerge what effect this might have on the renewable energy sector in the U.S.
Particularly the solar and wind industries seem to have lost a fair share on the new tax bill, namely about $12 billion in tax equity for solar and wind projects. This sector represented around 21% of the total investment in renewable energy projects in the U.S. in 2016.
With this new tax reform bill, Investment Tax Credit (ITC) and Production Tax Credit (PTC) are unusable by multinational banks and other corporations including those based in the U.S., so PV magazine.
This will make ITC and PTC essentially useless to many of the largest investment banks in the U.S.
With a seemingly political support for the fossil fuel industry in the U.S. and the focus on baseload, it seems that “orphaned technologies”, such as geothermal could be the winner. The bill essentially reinstates a 30% ITC for the technologies that expired at the end of 2016. According to voices in the industry, this would level the playing field allow geothermal to directly compete in the open market.
Lets see how this will evolve.
Source: PV Magazine