Sluggish Uptake From Renewables Sector as Clock Ticks on US Opportunity Zones

The clock is ticking for renewables developers to grab a bonus handed out in the Trump administration’s 2017 tax reform, celebrated by the Treasury this week. The Tax Cuts and Jobs Act of 2017’s Opportunity Zones provision, described by advocates as a “giant money fire hose,” could provide a capital gains tax benefit for renewable investments in up to 8,700 federally designated areas across the country, according to a report by FTI Consulting. Under the Opportunity Zones program, investors get tax credits for investing in low-income areas. The program allows equity investors to defer taxes on gains put into Qualified Opportunity Funds (QOFs), the investment vehicles used to invest in the zones, until December 2026. If investors hold their investments for five to seven years, they can increase their basis on the investment by 10 and 15 percent, cutting tax by an equal amount. If they hold the investments for at least a decade, any extra gain on the investment is not subject to federal tax.