The GOP Tax Reform Bill Is Taking the Wind Out of the Windmill Industry
The share prices of the world’s two biggest wind turbine manufacturers have fallen after the U.S. House of Representatives proposed whipping away tax credits for renewable energy in order to pay for tax cuts elsewhere.
Thursday’s tax reform bill maintains tax breaks for fossil fuel, but removes a $7,500 credit for electric cars and cuts the benefit from a wind credit by a third. Unless the bill is revised, it would also nix a 10% tax credit for big solar and geothermal projects after 2027.
Denmark’s Vestas, the world’s biggest wind turbine manufacturer, was quick to express its disappointment. So too were its investors—its stock price was down 8.6% on Friday.
Spain’s Siemens Gamesa Renewable Energy, the industry’s number two, saw its stock fall 5.2% on Friday. However, the company already had bad news this week, with a Reuters report pointing out that it was falling behind Vestas in the U.S. market.
The proposed removal of the electric car credit also hit Tesla’s stock by 6.8% in Thursday’s trading.
Of course, the bill may be revised, and soon. According to Bloomberg, Ways and Means Committee chair Tom Brady said he may rewrite it this weekend, ahead of a committee vote on Monday.
Iowa senator Chuck Grassley has also spoken out against the bill’s changes to the wind credit, as a 2015 compromise will already see the credit gradually phased out over the next few years.