Brookfield Renewable Partners Non Voting Units T.BEP.PR.R

US 2022 IRA

[retiredcf]

Unable to post the full report so here's the link. GLTA

https://www.adviceforinvestors.com/news/market-outlook/u-s-2022-ira-a-big-win-for-clean-energy/#gsc.tab=0

U.S. 2022 IRA a big win for clean energy

The U.S. Inflation Reduction Act of 2022 is a win for clean energy names with U.S. presence, and should help the country drive down emissions. The final legislation allocates US$370 billion to clean energy funding, keeping a majority of what was first laid out in the original Build Back Better (BBB) plan (US$555 billion for clean energy).

The bill passed votes in both houses of Congress with majority Democrat support in August before President Joe Biden signed it into law on Aug. 16, to the benefit of power and utility firms with strong U.S. footprints (notably the more pure-play renewable power firms).

Within our coverage universe, we specifically highlight NextEra Energy Inc. (NYSE-NEE), Clearway Energy Inc. (NYSE—CWEN.A),Brookfield Renewable Partners LP (TSX—BEP.UN; NYSE—BEP), Innergex Renewable Energy Inc. (TSX—INE) and Boralex Inc. (TSX—BLX).

Rising inflation and two consecutive quarters of negative GDP had the Democrats needing a meaningful legislative win before the U.S. midterms.

For the party to procure a Sen. Joe Manchin U-turn (the West Virginia Democrat known for his frequent opposition to his party's legislation) is a big win, but this bill needed the support of the entire party to become law. Sen. Krysten Sinema (a Democrat from Arizona) had voiced her concerns of a minimum 15 per cent corporate tax rate – which remains in the enacted legislation.

The support and credits per the legislation are projected to drive new clean energy investments that will translate into a 40 per cent reduction in carbon emissions. Notable items in the bill are about three- and roughly 10-year extensions for the dedicated wind production tax credit (PTC) and solar investment tax credit (ITC). 

As with the original BBB proposal, the magnitude of credits are tied to certain conditions (wage/apprenticeship requirements, domestic content, siting in certain locations). There is also a new standalone ITC for storage, which should increase the deployment (at new and existing sites). 

Further, the act has strong consumer energy incentives that should encourage increased electrification, driving positive benefits for power and utility companies.