Orsted : Phase out of US tax credits for renewable energies: not as bad as expected

Renewable energy stocks continued their rebound on European stock exchanges yesterday after the republicans of the US House of Representatives proposed a slower-than-anticipated cut in tax credits for renewable energy projects . Vestas, Orsted and Nordex closed the session with gains of 10.2%, 6.5% and 4.3% respectively. According to the Republicans' draft, the investment and production tax credits for wind or solar power would disappear in 2032 vs. 2035 as planned today under the IRA (Inflation Reduction Act). To benefit from the existing tax credits, renewable projects under development should be operational by 2032. For the production of electrolytic hydrogen, the tax credits introduced under the IRA would disappear in 2026 , allowing projects commissioned this year to benefit from the existing tax advantage. Finally, the Republicans in the US House of Representatives proposed to remove the tax credit for electric vehicles and repeal energy efficiency rules designed to encourage car manufacturers to build more zero emissions vehicles In this case, the measures are directly concerned with the tax credits of $7,500 and $4,000 for the purchase of new and used electric vehicles, respectively, as well as a credit of $1,000 for the installation of home charg ers . All in all, this development is good news for wind developers such as Orsted with massive offshore wind assets under construction (see Still too early to step in ).