Master Limited Partnerships, or MLPs, are an investment vehicle / structure that provide all of the tax benefits of a partnership with the fundraising ability of corporations. MLPs are widely used, well known and have been very effective is the oil and gas industry. Their structure also lends themselves perfectly for the development of renewable energy resources.
It was back in December of 2013 that The Brookings Institute first cheered on the prospects of MLP parity for renewable energy. here are a couple of choice quotes:
“Critics target not just the cost of clean energy itself but also the federal subsidies designed to support it. Badly needed now are more market-oriented and cost-effective ways to scale up clean energy development by leveraging the power of private finance.”
“And now the act has received a major boost. Last month, the JCT gave the MLP Parity Act a big leg up by scoring its revenue impact at just $307 million over 5 years and $1.3 billion over 10 years. By way of comparison, JCT forecasts existing fossil energy MLPs to cost the federal budget $6.7 billion and tax credit support for renewable energy to cost $12.6 billion over the next five years.”
“JCT’s comparatively low scoring of the MLP Parity Act is all the more noteworthy given that the committee’s “static” scoring methodology does not account for the overall economic growth that clean energy MLPs are expected to stimulate. Such growth across a range of industries and technologies will likely generate federal tax revenue that could cover part if not all of the MLP Parity Act’s cost to taxpayers.”