Dems propose expanding green energy tax breaks

Tax Hot Topics newsletter Democrats on the House Ways and Means Committee have released a discussion draft of legislation to extend and enhance a number of alternative energy incentives.

The Growing Renewable Energy and Efficiency Now (GREEN) Act includes provisions that would:

  • Extend the production tax credit under Section 45 for most property types through 2024, but at reduced levels for wind and enhanced for geothermal (with exceptions for offshore wind)
  • Extend the ability to claim the investment tax credit under Section 48 in lieu of the production tax credit under Section 45
  • Extend the investment tax credit under Section 48 for geothermal, solar, fuel cell, microturbine, small wind and combined heat and power property at the 30% rate through 2024 with various phasedowns thereafter, and expend the credit to include storage technology, waste energy recovery, biogas and linear generators
  • Extends the credits for biodiesel and biodiesel, renewable diesel and alternative fuels at current rates through 2021, with phasedowns thereafter
  • Extend the energy efficient commercial building deduction under Section 179D through 2024.
  • Revive the qualified advanced energy property credit with an allocation of $2.5 billion in additional credits from 2020 through 2024

The bill also extends the plug-in electric drive motor vehicle credit so that a $7,000 credit is provided for 200,000 to 600,000 electric vehicles per manufacturer and allows master limited partnerships to engage in certain activities generating renewable tax. The draft did not include any revenue raisers, with those to be provided later.

Republicans did not immediately dismiss the legislation, with House Ways and Means Chair Kevin Brady, R-Texas, saying they may be willing to negotiate over some of the provisions on a year-end extenders package if the revenue raisers were reasonable and the enhancements remained narrow.

Dustin Stamper
Managing Director
Washington National Tax Office
T +1 202 861 4144

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