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New Changes to the ITC?
The Senate could introduce a new change for solar/wind tax equity investors. Yesterday, the Senate recorded a party-line 52-48 vote to begin a 20-hour debate period after which the Senate will begin voting for final amendments. Notably, although the Senate bill preserves solar and wind tax credit and commence-construction rules, it also includes a "base erosion tax" that ignores tax credits below a minimum level for some taxpayers, particularly investors that make deductible payments to foreign affiliates. We've heard that this could reduce some investor demand for tax equity by as much as 50%. That said, we understand that an amendment supportive of renewable tax credits has potential and could avert this downside scenario for the solar & wind sectors. If the Senate bill passes, the House and Senate will start reconciling the separate bills.