Republican lawmakers presented their final $1.5 trillion tax bill late Friday evening, with a repair to the Base Erosion Anti-Abuse Tax (BEAT) provision that keeps 80 percent of the Investment Tax Credit and Production Tax Credit values.

The bill does not include the alternative minimum tax and leaves the previously agreed-upon phase-downs of both credits in place. 

The BEAT repair allows corporations to retain use of the ITC and the PTC to lower taxable income, leaving a key financing mechanism for renewables projects at least partially in place. However, the BEAT provision may now apply to a larger swath of companies and banks, upping the number of potential tax equity investors that are subject to the tax. 

Tax lawyers and clean energy advocates are still parsing the bill’s full impact. But after a House version of the bill cut the PTC and ITC and a Senate version of the bill included the “poison-pill” BEAT provision, which would have eliminated billions of dollars in investment, the outcome is relatively positive for the clean energy industry. 

“All in all, while more banks may be subject to the tax, the amount of tax credits at risk is reduced,” said Keith Martin, a transactional lawyer at Norton Rose Fulbright. “I think the market should be able to function, but there will be a struggle over whether full value is given for that 20 percent that is at risk.”

Republicans designed the BEAT provision to keep multinational companies from “earnings stripping,” where companies can pay less in taxes by deducting payments they make to operations abroad. 

The provision requires corporations to calculate their tax using two numbers: one equaling 10 percent of the company’s taxable income and one determining the company’s tax liability minus any tax credits. The amended provision allows companies to add 80 percent of the tax credit’s values back into that calculation. The company must pay any difference between the two sums. 

Keeping the corporate alternative minimum tax in the bill, as in the final Senate version, could also have removed the corporate tax benefits from the PTC and the ITC. Though the final tax bill lowers the corporate tax rate from its current 35 percent to 21 percent, that change will not impact investment for renewables projects without the AMT. 

Dropping the AMT comes as a relief to the clean energy industry, but tax bill watchers ultimately expected that change in the final bill. The more significant outcome is the adjustment to the BEAT provision, which clean energy trade organizations lobbied hard to change. 

“It’s one of these things where you can’t call it a win for clean energy, because renewable energy isn’t helped by this bill,” said Gregory Jenner, a tax attorney at Stoel Rives. “But it is fair to say that they weren’t hurt nearly as bad as they could have been.”

After receiving clarity on the bill’s contents, renewable energy trade organizations and advocates offered cautious plaudits.

“From the perspective of the wind andsolarindustry, and certainly the companies we’ve talked to, we’re very grateful to the members of Congress in both chambers that were really working behind the scenes to make this possible," said Isaac Brown, managing partner at 38 North Solutions. "Ideally we would like the status quo to remain in all respects, but given what passed out of the Senate a few weeks ago, this is certainly a significant improvement.”

However, the full implications of the BEAT change remain somewhat uncertain. 

“We are grateful for the elimination of provisions that would have decimated future renewable energy growth and even penalized past investment in wind and solar power, but we remain concerned about the potential impacts of the new Base Erosion Anti-Abuse Tax on renewable energy finance,” said Gregory Wetsone, president and CEO of the American Council on Renewable Energy, in a statement. “It will take some time to assess the statutory language and determine how the financial institutions that invest in wind and solar power, and play a central role in allowing developers to utilize tax credits, will respond.”

Tax experts will spend the weekend working through the 1,097-page bill to determine exactly how the language may change investment. The ways in which the 80 percent credit values impact each investor’s strategy will undoubtedly vary. 

“It’s very situational; it’s going to depend on each tax equity investor,” said Jenner, who added that the 80 percent fix could be enough for many corporations. “I am assuming that this gives the companies much of what they need. It may not be all, but it’s probably enough.”

While the fix keeps the tax equity market on more solid footing than the provision's previous version, it also could knock some corporations out of the market. And it’s difficult to estimate the full extent of the bill’s implications on the $11 billion tax equity provided to renewables projects in 2016 and the $13 billion offered in 2015. 

“Nobody will have precise numbers until the market starts functioning next year,” said Martin.

Lawmakers said the bill will head to the House floor on Tuesday and will reach the Senate floor sometime later next week. It’s expected to pass both chambers, after last-minute changes brought more senators on board. Legislators still hope to put it on President’s Trump desk before Christmas.