President Trump described the bill as "a bit, beautiful tax cut for Christmas". He is expected to sign it into law in the next few days with the changes taking effect on New Year's Day.
The bill, agreed by both legislative houses and unveiled 15 December, leaves intact the Production Tax Credit (PTC) and Investment Tax Credit (ITC), despite earlier variations of the bill suggesting they could be cut.
However, it does introduce a change to the Base Erosion Anti-Abuse Tax (BEAT), which is designed to prevent multinationals from shifting profits overseas. The change to the tax could have reduced the potential monetisation of the ITC and PTC significantly.
In the compromise, lawmakers minimised the Senate's more dramatic changes to BEAT. The compromise version would allow tax tax credits, such as the PTC and ITC, to offset 80% of the impact of the tax, a substantial improvement on what the Senate had initially floated.
Even so, BEAT would still somewhat undermine the ITC and PTC in some cases. The exact implications remained unclear as of mid-December, but availability in the tax equity market may initially drop. Currently, the market is buoyant, so the decrease may be modest.
"I think things ended fairly well," said Keith Martin, co-head of projects at law firm Norton Rose Fulbright.
"The tax equity market will be fine. A few banks may drop out early [in 2018] while they get a handle on their potential BEAT exposure, but the 80% fix should allow most to remain in the market," he added.
BEAT was the only real disappointment for the wind industry. "The 80% repair applies only through 2025," noted Greg Wetstone, president and CEO of the American Council on Renewable Energy. "Therefore, it devalues the later years of the ten-year wind PTC."
"It was never going to help the wind industry," added Martin. "It started in a bad place and moved like a speeding train, but the wind industry did a good job fixing potentially harmful provisions before the train reached the station."
The new tax bill also cuts the corporate tax rate from 35% to 21%.
Congress is expected to vote on the $1.5 trillion tax bill this week before Donald Trump signs it into law, expected before Christmas.
The 1,000-page-plus bill cannot now be amended. And unless Republican Senators ignore their party whips, and assuming Trump signs it into law as expected, it will come into force in 2018.
Survival
Most dramatic is the survival of the $23/MWh, ten-year PTC.
The PTC, the main driver of US wind development, was to have been almost halved in the version unveiled by the House of Representatives in November. It would have axed expected US wind development in 2017-2020 from roughly 38GW to 19-20GW.
The credit will continue to be incrementally phased-out over the next three years.
Elsewhere, the ITC, more appealing to offshore wind projects because their development is slower, will stay at 30% for projects that started construction in 2016, and 24% for projects that started in 2017.
It will still be reduced at the same rate as the PTC.
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