House Republican Tax Bill Could Hurt Massachusetts EV, Wind Energy
By Tim Cronin, Policy Associate
Late last week, Congress passed a Republican-led tax bill with detrimental impacts for industries nation-wide.
The bill, passed in the House late last week, included a line item that if signed into law would eliminate the federal electric vehicle (EV) tax credit. The $7,500 income tax credit currently goes to consumers or businesses who purchase an electric vehicle, and is incentivizing EV adoption in Massachusetts.
In addition, the House GOP tax bill reduces the wind production credit, which incentivizes wind energy development, by 35%. The reduction, from 2.3¢/kWh to 1.5¢/kWh, would become effective immediately. The current wind production credit is set to expire in 2020.
Effect in Massachusetts
Both of these provisions run counter to current clean energy policies in Massachusetts. In January 2017 the Baker Administration reaffirmed its commitment to promoting electric vehicle use, signing the Act Promoting Zero Emission Vehicle Adoption into law. With a goal of 300,000 ZEVs registered in the state by 2025, retaining federal rebates for purchasing the vehicles is critical.
Moreover, a reduction in wind energy credits will adversely affect large offshore wind developments planned off the coast of southern Massachusetts. After passing a clean energy procurement bill last legislative session, the state is currently soliciting proposals for offshore wind projects with a total capacity of 1,600MW. A reduction in the federal tax credit could jeopardize the financing of these projects, possibly halting the installation of turbines.
Governor Baker has come out in opposition to the House GOP tax bill, although he has not cited the wind energy or electric vehicle rebates as the basis for his opposition.
The good news is that the current Senate GOP version of the tax plan doesn’t include similar provisions. Instead, it upholds the electric vehicle and wind energy tax credits. Some analysts believe that differences between the Senate and House bills will be compromised out of the final version of the bill. If the Senate is able to pass a tax bill, and if the Senate and House can come to a compromise agreement, then the final bill still requires approval from by President Trump to become law.
About the author: Tim assists in coordinating CABA’s Policy Program, and is a young professional with experience in community organizing and state politics. He is currently pursuing a B.A. in Economics at Stonehill College. Tim has previously studied Politics, Philosophy, and Economics (PPE) at Oxford University, and has interned at the State House and in local government. He currently serves as student-body president at Stonehill College where he has continued to fight for sustainable initiatives such as fossil fuel divestment, expanding the college’s solar farm, and reducing food waste. Tim is on the board of a local civic association in his hometown of Weymouth, and is the founder of the community nonprofit Green Weymouth. Tim enjoys reading The Economist, listening to podcasts, and exploring state parks in his free time.