The long-awaited House GOP tax package unveiled yesterday got the energy world buzzing, as it would end a $7,500 tax credit for electric vehicle purchases, thereby raising the costs for prospective buyers. It would also pare back the value of the wind energy production tax credit, and tighten the definition of what constitutes an "under construction" project eligible. The changes would raise an estimated $12.3 billion over a decade.
The American Wind Energy Association, wind industry's main trade group, said lowering the value of the credit from 2.3 cents per kilowatt hour to 1.5 cents would put over $50 billion in planned investments at risk.
Yes, but: Changes to the decades-old tax credit aren't the existential threat to the wind industry that they once were, thanks to the drop in technology costs over the years. The chart above is from the new Lazard report on electricity generation costs that we looked at yesterday.
Quick take on EVs: Turning to the proposal to nix the electric vehicle credit, my Axios colleague and EV expert Steve LeVine passed along some thoughts about whether the change will truly hurt the emerging sector:
- "A contrarian view would be that the credit was always capped at 200,000 cars per brand, so the carmakers were always going to have to stand on their own at some point, something Musk has said about Tesla repeatedly. In that vein, for incumbents, this only accelerates. For newcomers, though, it presents a bar to entry."