Trump Insider: Administration Won’t Attack Renewable Energy
The president-elect will not move to revoke wind and solar subsidies, according to a major Trump financial contributor who said he is a member of the transition team.
There has been a lot of angst in the renewable power sector over what the Trump presidency will mean, but according to a Trump insider, renewable energy will not be in the new president’s sights when he takes office in January.
The day after the election, shares of solar power companies like SolarCity, SunPower and Vivint Solar cratered, as did wind turbine maker Vestas, while shares of coal company Peabody Energy jumped more than 50%. But those drastic movements may not prove to be an accurate reflection of the realities the energy sector will face under Trump’s presidency.
“Energy is not one of the top five agenda items” on Trump’s to-do list when he takes office in January, according to a major Trump financial contributor who said he is a member of the transition team and spoke on the condition of anonymity.
The top issues on that agenda are tax reform, immigration, reforming health care (Obamacare), infrastructure, and trade.
“Everything with renewables continues; the credits will remain in place,” he said.
During his bid for the White House, Trump criticized solar power programs such as the Department of Energy’s loan to Solyndra and his presidential transition website includes no details on wind and solar policy.
But despite the campaign rhetoric, the momentum of power sector deal flow, which has come largely from renewable energy deals, is likely to continue, say market participants.
There have been two main drivers of renewable energy deals, says Dan Reicher, executive director of the Streyer-Taylor Center for Energy Policy and Finance at Stanford Law School. On the federal side, there are tax credits and accelerated depreciation. At the state level there are renewable portfolio standards.
Even with Congress in Republican hands after the election, it is unlikely there would be a move to repeal the production tax credit (PTC) for wind power or the investment tax credit (ITC) for solar power, Reicher said.
There is also a limited incentive to repeal either the PTC or the ITC as both were renewed in December on a stepped down basis with definitive expiration dates. The PTC is expiring by 2020 and the ITC will drop to 10% in 2021.
So, in addition to the benefit remaining in place, the step-down schedule is likely to provide an incentive for developers of wind projects in particular to push to close financing on their projects sooner rather than later. At the beginning of 2017, for instance, the PTC drops to 80%.
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