Impact of Trump Presidency on Renewable Energy Incentives Remains Uncertain

Morrison & Foerster LLP
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Last week's election, surprising many with Republican control of the political branches of the federal government, has led to significant uncertainty throughout the private and public sectors. The renewable energy industry is no exception, and the absence of specific policy proposals from President-elect Trump during the campaign and in the first week following the election has led industry participants and observers to seek insight from broad principles articulated by the Trump campaign and House Republicans in order to understand the implications, including for the various tax incentives that have subsidized the development of renewable energy projects for many years.

One source of potential guiding principles is in the House Republican blueprint for tax reform and other matters, issued in June 2016. The tax portion of the blueprint strikes familiar tones of base broadening through the elimination of deductions and tax credits and reduced rates, the first of which would appear to militate against an extension of the tax credits targeted at the renewable energy industry, which are already scheduled to be phased out under current law. However, many observers have cautiously expressed optimism that those phase-out provisions, including for wind and solar incentives, are not likely to be accelerated further through new legislation, particularly because the tax credits have enjoyed broad bipartisan support. Moreover, many tax practitioners expect that any major tax reform will have a transition period or grandfather tax incentives for investments and activities that have already begun.

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