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A conversation with Heather Cooper, a tax attorney at McDermott Will & Emery, about the construction rules in the tax bill.
This week I had the privilege of speaking with Heather Cooper, a tax attorney at McDermott Will & Emery who is consulting with renewables developers on how to handle the likelihood of an Inflation Reduction Act repeal in Congress. As you are probably well aware, the legislation that passed the House earlier this week would all but demolish the IRA’s electricity investment and production tax credits that have supercharged solar and wind development in the U.S., including a sharp cut-off for qualifying that requires beginning construction by a date shortly after the bill’s enactment.
I wanted to talk to Heather about whether there was any way for developers to creatively move forward and qualify for the construction aspect of the credits’ design. Here’s an abridged version of our conversation, which happened shortly after the legislation passed the House Thursday morning.
How would this repeal affect projects that are already in the pipeline?
Projects in the pipeline are likely going to be safe harbored or grandfathered from these repeals, assuming they’ve gone far enough into their development to meet certain tax rules.
For projects that are less far along in the pipeline and haven’t had any outlays or expenditures yet, those developers right now are scrambling and I’ve gotten probably about 100 emails from my clients today asking me questions about what they can do to establish construction has begun on their project.
If they don’t satisfy those construction rules under the tax bill, they will be completely ineligible for the energy generating credits — the investment tax credit and production tax credit. A pretty significant impact.
What are the questions your clients are asking you?
I’m being asked how these credits are being repealed, if there’s any grandfathering, and how it’s impacting transferability. Also, they’re asking if these rules are tied to construction or placing in service or tax years generally. But also, it seems like people are asking what folks need to do to technically begin construction.
How much will this repeal affect fights between developers and opposition? I spoke to an attorney who told me this repeal could empower NIMBYs, for example.
I don’t know if it empowers them as much as NIMBYs will have less to worry about. If these projects are no longer economical, if these are no longer efficient to build, then the projects just won’t get built. NIMBYs and opponents will be happy.
I don’t think anything about the particular structure of the repeal, though, is empowering opponents. It is what it is.
Like, you can begin construction by entering into procurement contracts for equipment to build your facility so if you’re building a project you can enter into a contract today to get modules, warehouse those modules, and then use those modules to cause one or more projects as having begun construction based on when they were purchased.
If a developer today is able to enter into those contracts, that’ll be outside the scope of anything an opponent would have anything to do with.
Are we expecting people to make decisions before the Senate has acted on this bill or are people in a holding pattern?
When the election happened in November I had increased interest in clients who were concerned about a worst-case scenario like this, that credits would be repealed at or around the time of enactment. We had clients betting not that this would happen but [there was still] a 1% chance or a 5% chance. And folks asked then, how do we re-up thinking about how to begin construction on projects as a precautionary measure.
A lot of my clients were thinking about the worst case scenario beforehand. This is probably just escalating their thinking.
I don’t think people have a lot of time to think about what to do, though, given the 60-day cut off after enactment.
What is the silver lining here? Is there any? If I were to talk to a developer right now, is there an on the bright side here?
The short answer is no. Maybe it makes power projects a lot more expensive and American energy a lot more expensive and therefore those building power projects can make more money from their existing projects? That’s whether they’re renewable or otherwise. Other than higher power costs – for consumers, regular old taxpayers – there’s not really a bright side.
So, what you’re saying is, you don’t have any good news?
The good news is the Senate is still out there and needs to review this. There are a few senators who’ve expressed strong support of these credits – I’m not super optimistic, but four senators tend to have a bit more sway than congresspeople do.
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The Nimbus wind project in the Ozark Mountains is moving forward even without species permits, while locals pray Trump will shut it down.
The state of Arkansas is quickly becoming an important bellwether for the future of renewable energy deployment in the U.S., and a single project in the state’s famed Ozark Mountains might be the big fight that decides which way the state’s winds blow.
Arkansas has not historically been a renewables-heavy state, and very little power there is generated from solar or wind today. But after passage of the Inflation Reduction Act, the state saw a surge in project development, with more than 1.5 gigawatts of mostly utility-scale solar proposed in 2024, according to industry data. The state also welcomed its first large wind farm that year.
As in other states – Oklahoma and Arizona, for example – this spike in development led to a fresh wave of opposition and grassroots organizing against development. At least six Arkansas counties currently have active moratoria on solar or wind development, according to Heatmap Pro data. Unlike other states, Arkansas has actually gone there this year by passing a law restricting wind development and requiring all projects to have minimum setbacks on wind turbines from neighboring property owners of at least 3.5-times the height of the wind turbine itself, which can be as far as a quarter of a mile.
But activists on the ground still want more. Specifically, they want to stop Scout Clean Energy’s Nimbus wind project, which appears to have evaded significant barriers from either the new state law or a local ordinance blocking future wind development in Carroll County, the project’s future home. This facility is genuinely disliked by many on the ground in Carroll County; for weeks now, I have been monitoring residents posting to Facebook with updates on the movements of wind turbine components and their impacts to traffic. I’ve also seen the grumbling about it travel from the mouths of residents living near the project site to conservative social media influencers and influential figures in conservative energy policy circles.
The Nimbus project is also at considerable risk of federal intervention in some fashion. As I wrote about a few weeks ago, Nimbus applied to the Fish and Wildlife Service for incidental take approval covering golden eagles and endangered bats throughout the course of its operation. This turned into a multi-year effort to craft a conservation plan in tandem with permitting applications that are all pending approval from federal officials.
Scout Clean Energy still had not received permission by the time FWS changed hands to Trump 2.0, though – putting not only its permit but the project itself in potential legal risk. In addition, activists have recently seized upon risks floated by the Defense Department during development around the potential for the turbines to negatively impact radar capabilities, which previously resulted in the developer planning towers of varying heights for the blades.
These risks aren’t unique to Nimbus. Some of this is a reflection of how wind projects are generally so large and impactful that they wind up eventually landing in a federal nexus. But in this particular case, the fact that it seemed nothing could halt this project made me wonder if Trump was on the minds of people in Carroll County, too.
That’s how I wound up on the phone with Caroline Rogers, a woman living on Bradshaw Mountain near the Nimbus project site, who told me she has been fighting it since she first learned about it in 2023. Rogers and I chatted for almost an hour and, candidly, I found her to be an incredibly nice individual. When I asked her why she’s against the wind farm, she brought up a bunch of reasons I couldn’t necessarily fault her for, like concerns about property values and a lack of local civil services to support the community if there were a turbine failure or fire at the site.
“I still pray every day,” she told me when I asked her about whether she wants an outside force – à la Trump – to come in and do something to stop the facility. “There have been projects that have been stopped for various reasons, and there have been turbines that have been taken down.”
One of the things Rogers hopes happens is that the Fish and Wildlife Service’s bird crackdown comes for the Nimbus project, which is under construction even as it’s unclear whether it’ll ever get the take permits under the Trump administration. “Maybe it can be more of an enforcement [action],” she told me. “I hope it happens.”
This is where Trump’s unprecedented approach to energy development – and the curtailment of it – would have to cross a new rubicon. The Fish and Wildlife Service has rarely exercised its bird protection enforcement abilities against wind projects because of a significant and recent backlog in the permitting process related to applications from the sector. Bill Eubanks, an environmental attorney who works on renewables conflicts, told me earlier this week that if a developer is told by the agency it needs a permit, then “they’re on notice if they kill an eagle.” But while enforcement powers have been used before, it is “not that common.”
Even Rogers knows intervention from federal species regulators would be a potentially unprecedented step. “It can never stop a project that I’ve seen,” she told me.
Yet if Trump were to empower FWS to go after wind projects for violating species statutes, it is precisely this backlog that would make projects like Nimbus a potential target.
“They got so many applications from developers, and each one takes so much staff time to finalize,” Eubanks told me. “Even before January 20, there was already a significant backlog.”
Scout Clean Energy did not respond to requests for comment. If I hear from them or the Fish and Wildlife Service, I will let you know.
And more on the week’s most important conflicts around renewable energy projects.
1. Newport County, Rhode Island – The Trump administration escalated its onslaught against the offshore wind sector in the past week … coincidentally (or not) right after a New England-based anti-wind organization requested that it do so.
2. Madison County, New York – Officials in this county are using a novel method to target a wind project: They’re claiming it’ll disrupt 911 calls.
3. Wells County, Indiana – A pro-solar organization is apparently sending mass texts to people in this county asking them to sign a petition opposing a county-wide moratorium on new projects.
4. Henderson County, Kentucky – Planning officials in this county have recommended a two-year moratorium on wind power, sending the matter to a final vote before the county fiscal court.
5. Monterey County, California – Uh oh, another battery fire in central California.
Chatting party polarization with League of Conservation Voters CEO Pete Maysmith.
For this week’s conversation I chatted with Pete Maysmith, CEO of the League of Conservation Voters. There’s no one I’d rather talk to at a moment when any conflict over a solar farm can turn into the equivalent of a heated political campaign. I wanted to know how LCV is approaching the way renewables are becoming more partisan and the insurgent rise of local opposition to project development. Thankfully, Maysmith was willing to take some time right before the Labor Day weekend to sit in my hot seat.
The following conversation has been lightly edited for clarity.
How is your organization attempting to counter the way support for renewable energy projects on the local level is becoming increasingly partisan?
I’m actually not as convinced that’s the case. There’s certainly some markers around it being partisan at times, but I also know there’s lots of polling that shows by far the most popular form of energy is solar. Wind is No. 2. Below that you start to get the fossil fuel forms of energy. I actually think there’s broad support.
That doesn’t mean it is always uncontroversial, but I think there’s a couple things that are really interesting about that. One, a lot of the anti-renewables sentiment falls into a follow-the-money category, in that there is funded opposition intentionally designed to foment opposition to things like offshore wind or sometimes solar facilities. It’s funded by fossil fuel interests — so yes, there’s opposition, but understanding where that springs from. And I think the second thing is that there is, I think, a real lack of full understanding among the public about the fact that renewable energy is the fastest and the cheapest form of energy to bring onto the grid right now. There’s probably a belief or an association that fossil fuels are cheaper. That’s simply not true.
I think that’s a reason to do effective public education — that as we deal with spiking electricity bills across the country, the most effective thing we can do to address it is to bring the fastest and the cheapest form of energy online.
But that doesn’t account for the fights I follow across the country. Those projects are tagged as being “Green New Deal” projects or satisfying some sort of “woke left” agenda. That sentiment very much exists. What do you do about that?
I think you just have to make the case that it’s the cheapest and the fastest form of energy. 93% of all energy brought onto the grid was wind, solar, and battery capacity because it’s the cheapest and the fastest to bring on. You can’t get gas turbines. Meanwhile, energy bills are spiking. Data centers are going in. Extreme storms … all of these things and more are causing demand to spike. What this means is you need more supply.
How we address this is to not say renewables are better than fossil fuels. We obviously think that from a climate perspective, but let’s not have that conversation first. Let’s start with a conversation about what is the cheapest and the fastest form of energy. We need people to understand that if you want to address rising energy prices, let’s use the cheapest and the fastest form of energy in terms of what to bring onto the grid.
For me, the next place I go is to these other concerns around renewable energy. What are you working on to address rising concerns around renewables and farmland, for instance?
I think that there’s lots of opportunity for renewable energy projects to be win-win in all sorts of ways. Look at the projects started under the Inflation Reduction Act. 80% of those were in Republican congressional districts. We had a running list for a while of Republican House members who voted against the IRA – a partisan bill, right? – who then went to ground-breakings and ribbon-cuttings and dirt-shovel events to celebrate battery plants opening and wind or solar facilities.
That doesn’t mean they’re all free of conflict. I’m not saying that. But there are a lot of places where Republicans were celebrating those very projects.
In terms of project by project, take offshore wind. A lot of our affiliates have done a lot of work in New England in localities to talk about the benefits of an offshore wind project. Does that mean 100% of the people always support it? No, of course not. But in lots of instances, we’ve developed a good broad base of support for offshore wind projects because of the jobs, because it creates revenue, and because solar and wind are the cheapest and fastest forms of energy to bring onto the grid.
I often hear about the need for more organizing at the grassroots and local level to get more support into county hearings and planning commission meetings. What are you doing about that?
One of the things I love the most about LCV is the work we do about our 33 affiliates. It’s the affiliates in many of the states with these projects happening that are deeply engaged. Sometimes that’s at the state legislative level to oppose bills that would stop renewables. Sometimes it’s at that level to help speed approval of renewables projects, which we fought for in Illinois. And sometimes it’s at the local level, including to stop efforts to block renewables siting. Our folks in New England have been organizing regionally for offshore wind, for example.