Leveling the Playing Field for Clean Energy Investment

If you wanted to start an energy project - from a traditional energy source like oil or a clean energy source like solar or wind - the first thing you need to do is attract investors. If you don't have access to capital, your project is unlikely to get off the ground.

One of the ways energy projects are financed is through a mechanism known as a Master Limited Partnership or MLP. An MLP is a business structure where investors provide capital to a managing partner that handles the MLP's daily operation. (You can read a lot more about the operating model of MLPs here.)

Here's where it gets interesting. For years, the MLP structure has only been available to oil and gas endeavors.

Today, a bipartisan group of Senators and Representatives introduced new legislation to level the playing field for all sources of energy. The Master Limited Partnerships Parity Act will allow all energy sources - including clean energy sources - to have a shot at the MLP model. This will level the playing field and give all domestic energy sources a fair shot to compete in the marketplace.

This simple tweak (the entire bill is 600 words long) to the tax code could unleash a significant new revenue stream to start up clean energy companies.  With sponsors ranging from Democratic Senator Chris Coons to Republican Ted Poe, this commonsense legislation could actually move forward in this bitterly divided Congress.