Renewables – Page 9 – Global Power Law & Policy

Tax Credits for Storage After Solar or Wind?

Mar 09 2018

By Elizabeth Crouse, Elias Hinckley and William Holmes

On Friday, March 2, the Internal Revenue Service released Private Letter Ruling (“PLR”) 201809003. The PLR is not binding precedent, but it indicates that the IRS will permit a taxpayer to claim a Code Section 25D credit in respect of a residential battery installed after the solar panels to which it will be attached was installed. In the PLR, the IRS expressly states that it will treat the battery as property that “uses solar energy to generate electricity,” provided only solar energy is used to charge it.

The PLR concerns individuals claiming a credit for a residential system, but don’t stop reading. This outcome matters for C&I and utility scale projects also.

Tax Credits for Energy Facilities Extended in New Budget Bill

Feb 14 2018

By Charles Purcell, Won-Han Cheng, Elizabeth Crouse, and Andrea Templeton

Congress recently enacted the Bipartisan Budget Act of 2018, which contained a number of extenders applicable to tax credits for energy facilities. In the case of PTC-eligible energy facilities that were not covered by the earlier extension applicable to wind and solar, the credit was extended to facilities where construction was commenced before January 1, 2018. This new rule applies to closed and open loop biomass, geothermal, landfill gas, trash, qualified hydropower, and marine and hydrokinetic facilities. In addition, the election to claim the ITC in lieu of the PTC on these facilities was also extended to facilities where construction was commenced before January 1, 2018.

The ITC provisions were amended to extend the “commence construction” dates for 30% credits for fiber optic solar, qualified fuel cell, ground based thermal heating and cooling systems, and qualified small wind energy property to be consistent with solar facilities (terminating at the end of 2021). The Act also extended the “commence construction” dates for 10% credits relating to qualified microturbine and combined heat and power system property (also terminating at the end of 2021). To be eligible for the extension, combined heat and power system property must be placed into service after December 31, 2016.

In addition, the credits for fiber optic solar, qualified fuel cell and qualified small wind project will step down over the next 5 years. It also appears that any such property not placed in service by the end of 2023 will not be eligible for any ITC.

Energy Storage: 2017 Year in Review

Feb 12 2018

This issue of EDGE Advisory: Energy Finance Report reviews energy storage developments in 2017, focusing on the key factors that will impact the sector going forward. This issues covers the following topics:

To view the full newsletter, please click here.

Highlights in this issue include:

Heading into 2018, we look forward to the industry’s accelerating growth, and to continuing to work closely with companies, investors, trade associations, and policy makers in addressing changes in market rules and maximizing the opportunities for energy storage across the electric power sector.

To download a printable PDF of the publication, open the link above and click on the fifth icon from the left in the magazine toolbar at the top of the page.

President Trump Imposes Tariffs on Imported Solar Modules and Cells

Jan 23 2018

By Stacy Ettinger and James Wrathall

President Trump announced the imposition of tariffs on imported crystalline silicon photovoltaic (“CSPV”) modules and cells, as previously recommended by the U.S. International Trade Commission. The tariffs will be effective February 7, 2018.

Importers will be required to pay a tariff in the amount of 30 percent of the entered value in the first year, declining by 5 percent a year in each of the second, third, and fourth years. With respect to CSPV solar cells, the first 2.5 gigawatts imported in each year will be exempted from the tariff. These tariffs are in addition to the antidumping and countervailing duties relief previously imposed by the U.S. Department of Commerce on Chinese solar imports.

For U.S. solar developers and installers, the initial 30 percent tariff is expected to add 10 to 15 cents per watt to the final installed price. Green Tech Media Research (“GTM”) has predicted this will cause a reduction of approximately 10 percent in U.S. installed solar capacity. The tariffs do not apply to technologies other than CSPV, specifically thin film modules. Therefore manufacturers of thin film products such as Solar Frontier and First Solar may see increased relative market share.

The biggest impacts on projects are expected in the utility-scale solar sector, which is largely dependent on being competitive with other generation sources. Residential solar is viewed as more resilient and less sensitive to price changes.

Some CSPV manufacturing might shift to free trade agreement countries not included in the injury finding. In particular, manufacturers based in Singapore or Canada may benefit, if the President’s proclamation reflects the approach taken by a majority of the ITC Commissioners to exclude these countries from the tariff program.

China, South Korea, and other countries with exports subject to the tariffs will likely file complaints before the World Trade Organization (“WTO”). It is unclear what position the current Administration would take in response to an adverse WTO decision, if any. In any case, the WTO dispute settlement process itself could take anywhere from two to four years to complete.

Companies should consider steps to mitigate impacts of these tariffs. Reportedly over two gigawatts of modules have already been procured for 2018 projects in the United States. Accessing stockpiles of solar equipment may aid in reducing economic impacts.

The formal proclamation signed today by President Trump provides for exclusion of particular products from the safeguard measure. Procedures for requests for exclusion will be published in the Federal Register within 30 days. Companies may want to review the product exclusion process and consider whether an exclusion request is warranted.

ACORE and Bloomberg New Energy Finance – State of the Industry Webinar: Financing Renewables Post-Tax Reform

Jan 23 2018

On Wednesday, January 24, 2018 from 12:00-1:30pm ET, K&L Gates Seattle associate Elizabeth Crouse will be moderating the ACORE and Bloomberg New Energy Finance sponsored webinar “Financing Renewables Post-Tax Reform.”

The State of the Industry Webinar, a quarterly series produced in partnership between ACORE and Bloomberg New Energy Finance, offers the latest intelligence and analysis on renewable energy markets, finance and policy.

Provisions included in the tax reform package will affect how leading financiers of renewable energy projects are taxed on their investments. These changes could impact the availability of tax equity – a critical source of financing that is a significant catalyst for market growth and responsible for roughly 20% of annual U.S. renewable energy investment. On this webinar, experts will consider how changes to the tax code might shake out in the renewable energy market, alternate sources of project financing and other factors developers should expect in 2018 and beyond.

Policy Update:

Greg Wetstone, President & CEO, ACORE

Todd Foley, Senior Vice President of Policy and Government Affairs, ACORE

Markets Update:

Ethan Zindler, Head of Americas, Bloomberg New Energy Finance

Moderator:

Elizabeth Crouse, Associate, K&L Gates LLP

Speakers:

Marshal Salant, Managing Director, Head of Alternative Energy Finance, Citi

Meghan Schultz, Senior Vice President, Structured Finance, Invenergy LLC

Kevin Walsh, Managing Director, Renewable Energy, GE Energy Financial Services

To register for this webinar, please click here.

Washington, D.C. Partner Recognized in #Solar100

Jan 18 2018

Elias Hinckley

Congratulations to Washington, D.C. partner Elias Hinckley, ranked as one of the 100 thought leaders on the kWh Analytics #Solar100. See the full list here.

Tax Reform Goes to the President: How Did Renewables Fare?

Dec 21 2017

By Charles H. Purcell, Rachel D. Trickett, and Elizabeth C. Crouse

On December 20, 2017, the U.S. House of Representatives voted to send the Tax Cuts and Jobs Act (the “Act”) to the president for his signature, which is the final step required to make the Act effective. What does the final bill mean for the renewable energy industry? The Investment Tax Credit (“ITC”) and the Production Tax Credit (“PTC”) appear to remain unchanged (for now) and the Base Erosion and Anti-Abuse Tax (aka, the BEAT or International AMT) in the final version of the Act is better for the renewables industry than in previous iterations. Nevertheless, a handful of other provisions may significantly impact the renewable energy industry.

Federal Court Rejects California Public Utilities Commission’s Re-MAT Program as Non-Compliant with PURPA

Dec 20 2017

By Buck B. Endemann, William M. Keyser, Molly Suda, and Toks A. Arowojolu

On Wednesday, December 6, 2017, the United States District Court for the Northern District of California (“the Court”) issued a decision in Winding Creek Solar LLC v. Peevey (“Winding Creek decision”),[1] finding that the California Public Utilities Commission’s (“CPUC”) Renewable Market-Adjusting Tariff (“Re-MAT”) program violated the federal Public Utility Regulatory Policies Act (“PURPA”). The Court also found that the CPUC’s “Standard Contract” for generators less than 20 MW failed to comply with PURPA, throwing into question the effectiveness and pricing associated with a significant amount of renewable energy generation currently under contract.

Tax Reform Conference Bill Released: PTC and ITC Emerge Battered

Dec 16 2017

By Elizabeth C. Crouse

Earlier this evening, the conference committee considering the tax reform bills previously passed by the U.S. House of Representatives and the U.S. Senate released legislative text for the much rumored conference bill. Although neither the Production Tax Credit (“PTC”) nor the Investment Tax Credit (“ITC”) are directly impacted, the Base Erosion and Anti-Abuse Tax (often referred to as the “BEAT” or “International AMT”) provides only partial relief for U.S. corporations subject to that tax that have PTCs or ITCs available to offset their U.S. federal income tax.

Under the conference bill, a U.S. corporation that is subject to the International AMT may use up to the lesser of 80% of the PTCs and ITCs available to them or the “base erosion minimum tax amount” only through 2025. The PTC and ITC cannot be used to eliminate any International AMT otherwise due.

As in previous iterations of the Tax Cuts and Jobs Act, the conference bill does not distinguish between PTCs and ITCs earned in respect of qualifying projects that have already been placed in service or begun construction. In addition, although the International AMT rate has been adjusted (5% for tax years beginning in 2018, 10% for tax years beginning between 2019 and 2025, and 12.5% thereafter), the rate applicable to U.S. corporations that are in an affiliated group with any bank or registered securities dealer will always be 1% higher than the generally applicable rate. In addition, the PTC and ITC cannot be used to reduce the International AMT due in any tax year beginning in 2026 or thereafter.

Thus, although the impact of the International AMT is somewhat reduced in the conference bill, the International AMT could still prompt some multinational investors in renewable energy projects to divest certain operating projects and projects under development as well as discourage investment in new projects.

New York Signals Continued Support for Energy Storage as Governor Signs Procurement Target Legislation

Dec 08 2017

By Buck Endemann, Bill Holmes, and Mike O’Neill

On November 29, 2017, New York Gov. Andrew Cuomo (D) signed Assembly Bill A6571. Passed by the New York legislature in June 2017, this legislation directs the New York Public Service Commission (PSC) to undertake two efforts: (1) institute a proceeding to establish the Energy Storage Deployment Program within 90 days; and (2) set a target by January 1, 2018, for the installation of qualified energy storage systems across the state by 2030.

Catagory:Renewables