Renewable energy companies across the US have formed a coalition to lobby for the passage of a bill that would level the playing field between clean energy and fossil fuels.
The coalition, Financing America’s Investment in Renewables (FAIR), wants the average American to be able to invest in renewable energy projects as they can now do for oil, gas, coal and other "natural resource" projects.
All that’s required is a small tweak in the tax code, since fossil fuel projects already qualify. It would simply extend Master Limited Partnerships (MLPs) to renewable energy projects as well.
Believe it or not, renewables, such as solar, wind and geothermal are currently not categorized as "natural resources" while oil, gas and coal are.
The Master Limited Partnerships Parity Act would allow wind, solar, biofuels and other clean energy projects to be structured as "master limited partnerships." Under this structure, shares can be traded as common stock, and they are taxed at the lower rate of partnership – avoiding higher corporate income tax rates.
The bill has been re-introduced in the
US House by Ted Poe (R-TX) and in the Senate by Chris Coons (D-DE).
MLPs currently have a market capitalization of $350 billion, with 80% of that funding devoted to oil-and-gas projects.
Specifically included are a broad range of renewable energy resources and technologies: solar, wind, closed and open loop
biomass, geothermal, municipal solid waste, hydropower, marine and hydrokinetic, fuel cells, and combined heat and power systems. The legislation also allows for a range of renewable transportation fuels to qualify, as well as certain energy-efficient buildings, electricity storage, carbon capture and storage, renewable chemicals, and waste-heat-to-power technologies.
"The MLP could be an attractive financing vehicle for some of our renewable energy projects," says Jim Murphy, Chief Operating Officer of Invenergy LLC. "It would give us a viable public market option for a portion of our capital needs, much like oil, gas, and coal have enjoyed for decades."
More than 200 companies and organizations have signed a letter supporting passage of the bill.
FAIR believes the MLP Parity Act should not substitute for the Production Tax Credit or the Investment Tax Credit. Rather, it would complement those credits as part of a long-term renewable energy tax policy.
Founding members include First Wind, Vestas, Gamesa, OWN Energy, Everpower, Invenergy, Geronimo, Pattern Energy, juwi Solar and Keybanc Utility, Power and Renewables, Terra-Gen Power, and TradeWind Energy.
Here is FAIR’s website:
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