A plan being fashioned by Democrats in the US House of Representatives that would allow renewable energy developers to form “tax-advantaged partnerships” leveraged for decades by the oil & gas industry to construct American pipeline and storage infrastructure has been given the backing of the Biden administration, according to reports out of Washington DC.
News-service Reuters cited anonymous sources confirming White House support for opening access to so-called master limited partnerships (MLPs) to developers in the wind, solar and other clean-energy industries so as to provide these sectors with the possibility of “combin[ing] the funding advantages of corporations with the tax advantages of partnerships”.
Such a change to the terms of MLPs, American Council for Renewable Energy CEO Gregory Wetstone told Recharge, would aid in “levelling the playing field” in the build out of renewables-fed power capacity as the US energy transition accelerated.
“Making renewable technologies eligible for [MLPs] will help level the playing field for renewable energy in an important area of the capital markets at a pivotal moment for addressing climate change,” he said.
This expansion of MLPs, which is understood to be included in Democrat-backed $3.5trn spending legislation being debated in the House, would make it possible for retail investors “to direct invest in renewable energy projects, rather than only being able to invest in companies that may deal in renewables", Clark Sackschewsky, tax market leader at BDO USA, told Reuters.
MLPs are a form of business venture that marries the tax benefits of a private partnership – where profits are taxed only when investors receive distributions – with the liquidity of a publicly traded company.