Latest news with #ProductionTaxCredit
Yahoo
7 days ago
- Business
- Yahoo
Here's what proposed clean energy tax cuts could mean for Virginia
Environmental groups in Virginia are worried some clean energy projects may be at risk of losing important tax credits if federal energy credits remain on the chopping block as part of President Donald Trump's massive tax cut bill. The bill is 'a disaster for Hampton Roads' and could be a 'serious blow' to jobs and economic development, said Blair St. Ledger-Olson, director of advocacy and campaigns for the Virginia League of Conservation Voters. 'Rolling these tax credits back harms the region's opportunity to be an anchor in the offshore wind supply chain, revitalize our port infrastructure and be a national leader in the clean energy transition, not to mention threatening the environmental progress we've fought so hard to achieve,' St. Ledger-Olson said. The House passed the One Big Beautiful Bill Act last month, and the Senate is now poised to take up the proposal and make its own suggestions. The House version repeals or gives earlier deadlines to clean energy tax credits passed in the 2022 Inflation Reduction Act during former President Joe Biden's term. Biden's climate law has been considered important for the clean energy transition, but the House bill effectively ends much of the law's incentives for renewable energy such as wind and solar power. Dominion Energy's Coastal Virginia Offshore Wind project, under construction off the coast of Virginia Beach, is a 2.6-gigawatt wind farm eligible for some of the IRA's tax credits like the Production Tax Credit or Investment Tax Credit. The IRA provides a 30% tax credit for offshore wind projects that began construction before 2026. The cost of the project has already risen from $9.8 billion to $10.7 billion and tariffs could add another $500 million to the cost. If the tax credits are restored, spokesperson Jeremy Slayton said they will 'substantially lower costs' for customers. The project did not receive any grant funding through the IRA, Slayton said. For solar projects, it's currently unclear which specific projects could be at risk. Robin Dutta, executive director of the Chesapeake Solar and Storage Association, said the only solar and storage projects that could be eligible for the Investment Tax Credit are projects that have already begun construction, or projects that begin construction within 60 days of the bill being signed into law. In addition to those parameters, projects must be completed by 2028. It also prevents residential solar projects financed through leases, which Dutta said are popular in Virginia, from getting the Investment Tax Credit at all. 'In general, any project that is awaiting zoning approval at a county is at risk. Larger projects that are waiting for their utility interconnection studies and grid upgrades to be completed are at risk of not completing construction by this deadline. No residential projects would qualify for a tax credit after 2025, if the current language becomes law. So, overall, the risk is to projects in the early stages of development.' Dutta said jobs at risk right now are business development and sales jobs, but once the existing pipeline of projects is built, the installers wouldn't have as many systems to build as they currently do. One project that business executives say will not be affected by the tax credits reductions is the undersea cable manufacturing facility being built in Chesapeake by LS Greenlink USA. The company touts more than $99 million in federal tax credits to help reduce costs. But Patrick Shim, managing director for LS Cable and System, told The Virginian-Pilot that the credits are safe from cuts under the new federal bill. LS Greenlink USA received 48C credits, which are not at risk. The 48C credits, known as the Qualifying Advanced Energy Project Credit, were created in 2009 and expanded under the Inflation Reduction Act. The US Department of Energy reports that 48C is 'a tax credit for investments in advanced energy projects … and is intended to build clean energy supply chains, drive investments and lower costs in energy communities.' The Port of Virginia was awarded $380 million through the IRA to move from fossil fuels to electric equipment, with a goal of eliminating all emissions by 2040. The money is a grant rather than tax credits. The Port did not respond to a request for comment about whether it received any tax credits through IRA. Scientists say a record amount of seaweed hit the Caribbean and nearby areas in May Schwarzenegger tells environmentalists dismayed by Trump to 'stop whining' and get to work Jockey's Ridge State Park: A half-century on the Outer Banks sand Wildfires burning across central Canada force more people to evacuate Volunteers needed for Clean the Bay Day in Suffolk Democrats have sounded the alarm over the massive tax cut and immigration bill, which also drastically cuts funding for Medicaid and other social services programs. But some Republicans have also pushed back on some spending cuts included in the House proposal, including the energy tax credit cuts. Rep. Jen Kiggans, Virginia Beach Republican, voted to approve the budget bill but noted the legislation 'isn't perfect.' Specifically, she pointed to the abrupt end to tax credits and financial support of renewable energy projects as an issue. She said she hopes further changes are made to protect these funding opportunities while the bill is in the Senate. 'These changes jeopardize local jobs, limit community access to affordable energy, and undercut innovation — especially in regions like ours, where energy resilience and national defense go hand in hand,' she said in a statement. Senate Republicans Lisa Murkowski of Alaska, John Curtis of Utah, Thom Tillis of North Carolina and Jerry Moran of Kansas wrote to Senate leadership urging a reconsideration of cuts of tax credits. 'A wholesale repeal, or the termination of certain individual credits, would create uncertainty, jeopardizing capital allocation, long-term project planning, and job creation in the energy sector and across our broader economy,' the senators wrote in an April 10 letter. Virginia's Democratic Sens. Mark Warner and Tim Kaine said in a joint statement the House bill would jeopardize investment and raise energy costs for Virginians. 'Rolling back these investments would not only endanger these jobs but also hinder our progress toward a more sustainable and affordable energy future,' the statement reads. 'We must protect the investments that are creating jobs and lowering costs for Virginians. The Republican plan puts our economic future at risk.'
Yahoo
30-05-2025
- Business
- Yahoo
4 Refining & Marketing Stocks to Watch as Margins Stay Tight
The Zacks Oil and Gas - Refining & Marketing industry is standing at a crossroads. On paper, things look solid—refined product inventories are tight, demand for gasoline and diesel is up, and long-term fundamentals remain constructive. Yet, refining margins tell a different story. Despite favorable supply-demand dynamics, market sentiment remains shaky. Concerns around economic slowdown and regulatory uncertainty, particularly in renewable diesel, have weighed on valuations and earnings expectations. Still, not all is gloom. U.S. refiners enjoy structural advantages like domestic crude access and low-cost inputs. And four names — Marathon Petroleum MPC, Phillips 66 PSX, Valero Energy VLO and Galp Energia GLPEY — stand out with strong assets, smart capital allocation, and long-term positioning that could reward patient investors. Industry Overview The Zacks Oil and Gas - Refining & Marketing industry consists of companies involved in selling refined petroleum products (including heating oil, gasoline, jet fuel, residual oil, etc.) and a plethora of non-energy materials (like asphalt, road salt, clay and gypsum). Some companies also operate refined product terminals, storage facilities and transportation services. The primary activity of these firms involves buying crude/other feedstocks and processing them into a wide variety of refined products. Refining margins are extremely volatile and generally reflect the state of petroleum product inventories, demand for refined products, imports, regional differences and capacity utilization in the industry. Other major determinants of refining profitability are the light/heavy and sweet/sour spreads. Refiners are also prone to unplanned outages. 3 Trends Defining the Oil and Gas - Refining & Marketing Industry's Future Margin Compression Despite Healthy Fundamentals: Despite low inventories and solid demand trends, refining margins have lagged expectations. Fundamentals appear strong — diesel and gasoline demand are up year over year, and inventory levels are tight — yet refining margins have remained muted. This disconnect may reflect broader macroeconomic concerns, such as the risk of a slowdown or recession, which is weighing on investor sentiment. Refiners are operating in a cautious environment where markets are pricing in pessimism, even as supply-demand dynamics suggest tighter Market and Policy Uncertainty Weigh on Renewable Diesel: The shift from the Blenders' Tax Credit (BTC) to the Production Tax Credit (PTC) has made renewable diesel less profitable. Many producers are seeing lower returns due to feedstock qualification issues and unclear policy direction — especially with possible changes to California's Low Carbon Fuel Standard (LCFS) rules. As a result, output is being cut, and a recovery will likely depend on a strong rebound in renewable fuel credits or clearer regulatory support, both of which are uncertain right Support Long-Term Refining Outlook: The refining industry appears well-positioned for an improved mid-cycle environment, supported by long-term fundamentals and structural advantages in the U.S. market. Marathon Petroleum expects global demand growth for refined products to persist, even as some 800,000 barrels per day of capacity is set to come offline across the U.S. and Europe. In parallel, U.S. refined product inventories remain below five-year averages, setting a favorable tone for margin expansion. Add to this the U.S. refining sector's locational advantage—easy access to domestic crude, low-cost natural gas and butane, and a flexible asset base—and it paints an encouraging picture for U.S. refiners. Zacks Industry Rank Indicates Bearish Outlook The Zacks Oil and Gas - Refining & Marketing is a 13-stock group within the broader Zacks Oil - Energy sector. The industry currently carries a Zacks Industry Rank #139, which places it in the bottom 43% of 245 Zacks group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates dull near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to industry's position in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are becoming pessimistic about this group's earnings growth potential. As a matter of fact, while the industry's earnings estimate for 2025 has gone down 38.3% in the past year, the same for 2026 has fallen 19.7% over the same the dim near-term prospects of the industry, we will present a few stocks that you may want to consider for your portfolio. But it's worth taking a look at the industry's shareholder returns and current valuation first. Industry Underperforms Sector & S&P 500 The Zacks Oil and Gas - Refining & Marketing industry has fared worse than the broader Zacks Oil - Energy Sector as well as the Zacks S&P 500 composite over the past industry has gone down 16.9% over this period compared with the broader sector's decrease of 8.2%. Meanwhile, the S&P 500 has gained 12.5%. Industry's Current Valuation Since oil and gas companies are debt-laden, it makes sense to value them based on the EV/EBITDA (Enterprise Value/ Earnings before Interest Tax Depreciation and Amortization) ratio. This is because the valuation metric takes into account not just equity but also the level of debt. For capital-intensive companies, EV/EBITDA is a better valuation metric because it is not influenced by changing capital structures and ignores the effect of noncash the basis of the trailing 12-month enterprise value-to EBITDA (EV/EBITDA), the industry is currently trading at 3.76X, significantly lower than the S&P 500's 16.65X. It is also below the sector's trailing 12-month EV/EBITDA of the past five years, the industry has traded as high as 6.95X and as low as 1.79X, with a median of 3.60X, as the chart below shows. 4 Stocks in Focus Marathon Petroleum: It is a leading independent refiner, transporter and marketer of petroleum products. Marathon Petroleum's access to lower-cost crude in the Permian, Bakken, and Canada helps it benefit from the differentials. The Zacks Rank #3 (Hold) company's exceptional cash flow generation and aggressive shareholder returns are the key drivers for stock price appreciation. You can see the complete list of today's Zacks #1 Rank stocks here. Findlay, OH-based Marathon Petroleum has a market capitalization of $48.7 billion. MPC beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. Shares of MPC have lost 9% in a year. Phillips 66: Based in Houston, TX, Phillips 66 is a diversified and integrated energy company established following the 2012 spin-off of ConocoPhillips' downstream operations. As one of the world's leading refiners, Phillips 66 operates 13 refineries, primarily in the United States, with a total refining capacity of 2.2 million barrels per 66 beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed in the other, the average being 10.6%. Shares of this Zacks Rank #3 company have lost 19% in a year. Valero Energy: San Antonio, TX-based Valero Energy is the largest independent refiner and marketer of petroleum products in the United States. The company has a refining capacity of 3.2 million barrels per day across 15 refineries located throughout the United States, Canada and the United Energy beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed in the other, the average being 122.9%. Shares of this Zacks Rank #3 company have lost 18% in a year. Galp Energia: It is a Portuguese integrated energy firm with a significant presence in the downstream segment. The company's Refining and Marketing unit is responsible for the supply and trade of oil and biofuels, and the operation of oil and gas refineries. It operates two refineries in based in Lisbon, has a four-quarter average earnings surprise of 56.8%. The firm has a market capitalization of $11.3 billion. This #3 Ranked company's shares have decreased 25% in a year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Marathon Petroleum Corporation (MPC) : Free Stock Analysis Report Valero Energy Corporation (VLO) : Free Stock Analysis Report Phillips 66 (PSX) : Free Stock Analysis Report Galp Energia SGPS SA (GLPEY) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-05-2025
- Business
- Yahoo
First Solar Soars On Tax Credit Compromise
First Solar (NASDAQ:FSLR) jumps 19.2% in early trading as House Republicans opt to trim but preserve key solar and wind tax credits. The House Ways and Means Committee's budget reconciliation bill keeps the Production Tax Credit and Investment Tax Credit untouched through 2028 before a gradual phase-down to 2032, a structure J.P. Morgan's Mark Strouse says aligns with or exceeds the more bullish end of investor expectations. Warning! GuruFocus has detected 5 Warning Signs with FSLR. First Solar led sector gains with a 22.2% advance, while Array Technologies (NASDAQ:ARRY) rallied 22.1%, Maxeon Solar (NASDAQ:MAXN) climbed 16.3%, Shoals Technologies (NASDAQ:SHLS) gained 15.7% and Sunrun (NASDAQ:RUN) jumped 15.9%, even as Enphase (NASDAQ:ENPH) and SolarEdge (NASDAQ:SEDG) slipped. Strouse notes that limits on products from foreign-influenced entities over the next two years could be a significant positive for First Solar, given that roughly 60% of its projected earnings through 2027 come from 45% ITC-eligible projects. He also sees benefits for Nextracker (NASDAQ:NXT) and Array, a mild headwind for wind-blade supplier TPI Composites (NASDAQ:TPIC), and a modest negative for GE Vernova's (NYSE:GEV) small modular reactor arm as the 45u nuclear credit phases down, though GEV shares still rose 3.2%. Why should investors care? First Solar's early rally underscores how policy tweaks, not wholesale cuts, can fuel a clean-energy rebound and tilt competitive advantage toward domestic suppliers. Investors will watch Senate action on reconciliation and any tweaks to the foreign-entity clause when the bill moves to the floor. This article first appeared on GuruFocus.
Yahoo
13-05-2025
- Business
- Yahoo
First Solar Soars On Tax Credit Compromise
First Solar (NASDAQ:FSLR) jumps 19.2% in early trading as House Republicans opt to trim but preserve key solar and wind tax credits. The House Ways and Means Committee's budget reconciliation bill keeps the Production Tax Credit and Investment Tax Credit untouched through 2028 before a gradual phase-down to 2032, a structure J.P. Morgan's Mark Strouse says aligns with or exceeds the more bullish end of investor expectations. Warning! GuruFocus has detected 5 Warning Signs with FSLR. First Solar led sector gains with a 22.2% advance, while Array Technologies (NASDAQ:ARRY) rallied 22.1%, Maxeon Solar (NASDAQ:MAXN) climbed 16.3%, Shoals Technologies (NASDAQ:SHLS) gained 15.7% and Sunrun (NASDAQ:RUN) jumped 15.9%, even as Enphase (NASDAQ:ENPH) and SolarEdge (NASDAQ:SEDG) slipped. Strouse notes that limits on products from foreign-influenced entities over the next two years could be a significant positive for First Solar, given that roughly 60% of its projected earnings through 2027 come from 45% ITC-eligible projects. He also sees benefits for Nextracker (NASDAQ:NXT) and Array, a mild headwind for wind-blade supplier TPI Composites (NASDAQ:TPIC), and a modest negative for GE Vernova's (NYSE:GEV) small modular reactor arm as the 45u nuclear credit phases down, though GEV shares still rose 3.2%. Why should investors care? First Solar's early rally underscores how policy tweaks, not wholesale cuts, can fuel a clean-energy rebound and tilt competitive advantage toward domestic suppliers. Investors will watch Senate action on reconciliation and any tweaks to the foreign-entity clause when the bill moves to the floor. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
01-05-2025
- Business
- Yahoo
Making Clean Energy Credits Count: What the IRA Means for Your Bottom Line
Clean energy is accelerating, and the Inflation Reduction Act (IRA) is a major driver. It introduced the largest package of federal clean energy tax incentives in U.S. history, with significant implications for developers, investors, and manufacturers across the sector. But taking advantage of these incentives isn't automatic. The credits come with detailed rules around eligibility, documentation, labor standards, and project design. Structuring a project correctly from the start can mean the difference between maximizing available credits or missing out on substantial savings. This guide breaks down the key tax credits, how they work, and the practical considerations that determine whether they deliver real financial value. The IRA expanded and extended several major tax credits. Here's what matters most for energy developers and investors: Investment Tax Credit (ITC). The ITC allows project owners to deduct a percentage of eligible project costs from their federal taxes. The base rate is 6%, but this can increase to 30% or more if certain labor and domestic content requirements are met. Qualifying technologies include solar, wind, battery storage, biogas, and microgrids. Production Tax Credit (PTC). Unlike the ITC, the PTC provides a per-kilowatt-hour credit over a 10-year period, rewarding production over time. For wind, solar, and other eligible technologies, it's especially appealing for projects with strong long-term generation capacity. The decision between PTC and ITC often comes down to the scale and projected output of the project. Section 48C Advanced Energy Project Credit. This credit targets manufacturers that produce clean energy components—solar panels, inverters, battery cells, and related infrastructure. It's especially valuable if your facility is located in an 'energy community,' such as a former coal or fossil-fuel-dependent area. As certified public accountants (CPAs), our role is to translate policy into practical financial planning. These credits are not automatic—they come with detailed qualifications, reporting requirements, and compliance obligations. Here are several areas where CPA guidance is essential. Credit Selection and Financial Modeling. We start by modeling both credit pathways (ITC vs. PTC) to determine which structure aligns better with your project's cash flow, tax position, and long-term goals. For example, developers with limited tax liability may favor PTCs if they can bring in tax equity partners, while those seeking upfront capital might prefer ITCs. Stacking Bonus Credits. The IRA offers additional 'bonus credits' that can substantially increase the value of your base credit. Examples include: Domestic Content Bonus. For using U.S.-manufactured materials. Energy Community Bonus. For locating projects in certain qualified geographic zones. Prevailing Wage and Apprenticeship Bonuses. For meeting labor standards throughout construction and operation. These add-ons can push total credits to between 40% and 70% of eligible costs—but only if your project is structured accordingly from the outset. We work with clients during early-stage planning to ensure the required documentation and standards are in place. Credit Monetization and Tax Equity Structuring. A key innovation under the IRA is the ability to transfer or sell tax credits. That means even entities with little or no federal tax liability can unlock their value. Alternatively, traditional tax equity financing structures—such as partnership flips or sale-leasebacks—remain viable. We assist clients in comparing these options based on cost, risk, and timing of funds. Compliance and Recordkeeping. The IRS has tied these incentives to rigorous compliance obligations, particularly around labor standards and domestic sourcing. The consequences of falling short—recapture of credits or disqualification—can be severe. We help clients implement systems to track payroll, materials sourcing, and energy production, and prepare the documentation needed for potential audits or investor due diligence. The IRA has changed the clean energy landscape—not just from a policy standpoint, but financially. However, unlocking its value requires more than just reading the statute. It demands detailed financial planning, early-stage strategic decisions, and strict operational discipline. CPAs in this space play a critical advisory role: analyzing tax credit structures, optimizing capital stacks, ensuring compliance, and mitigating risks. For energy developers and manufacturers, this isn't just a tax opportunity—it's a competitive advantage. If you're planning a clean energy project in the next 12 to 24 months, now is the time to sit down with an advisor who understands both the technical tax framework and the industry-specific considerations. — is the founder of Miller & Company LLP, a New York-based CPA firm focused on tax strategy, advisory, and compliance for businesses in the energy, real estate, and manufacturing sectors.
