Country:United States
Year:1993
Policy status:In Force
Jurisdiction:National
Date Effective:1993
Date Ended:2019
Policy Type:Policy Support, Economic Instruments>Fiscal/financial incentives>Tax relief, Economic Instruments>Fiscal/financial incentives>Taxes
Policy Sector:Electricity
Climate Change Policy Targets:Energy Sector, Electricity Generation, Renewable
Agency:U.S. Department of Treasury Internal Revenue Service (IRS)
URL:http://www.irs.gov/pub/irs-pdf/f8835.pdf
Renewable Energy Description:

The Renewable Electricity Production Credit (PTC) is a per-kilowatt-hour tax credit for electricity generated by qualified energy resources and sold by the taxpayer to an unrelated person during the taxable year. The credit ranges from 2.3 cents/kWh for wind, geothermal and closed-loop biomass to 1.1 cents/kWh for open-loop biomass, landfill gas, municipal solid waste, and qualified hydropower, as well as marine and hydrokinetic generation (with a capacity of 150kW or greater).

The duration of the credit is generally 10 years after the date the facility is placed in service, but January 2013 legislation revised the credit by removing "placed in service" deadlines and replacing them with deadlines that use the beginning of construction as a basis for determining facility eligibility. The PTC has been extended several times, most recently by the Consolidated Appropriations Act of 2016, which retroactively extended the credit through December 31, 2019, with a phase-down beginning for wind projects commencing construction after December 31, 2016. For projects commenced in 2017, the credit is reduced by 20%. The credit is reduced 40% for projects commenced in 2018, and by 60% for projects commenced in 2019. The Act also retroactively extended the tax credit for other eligible renewable energy technologies through December 31, 2016. 

Climate Change Description:

The Renewable Electricity Production Credit (PTC) is a per-kilowatt-hour tax credit for electricity generated by qualified energy resources and sold by the taxpayer to an unrelated person during the taxable year. The credit ranges from 2.3 cents/kWh for wind, geothermal and closed-loop biomass to 1.1 cents/kWh for open-loop biomass, landfill gas, municipal solid waste, and qualified hydropower, as well as marine and hydrokinetic generation (with a capacity of 150kW or greater).

The duration of the credit is generally 10 years after the date the facility is placed in service, but January 2013 legislation revised the credit by removing "placed in service" deadlines and replacing them with deadlines that use the beginning of construction as a basis for determining facility eligibility. The PTC has been extended several times, most recently by the Consolidated Appropriations Act of 2016, which retroactively extended the credit through December 31, 2019, with a phase-down beginning for wind projects commencing construction after December 31, 2016. For projects commenced in 2017, the credit is reduced by 20%. The credit is reduced 40% for projects commenced in 2018, and by 60% for projects commenced in 2019. The Act also retroactively extended the tax credit for other eligible renewable energy technologies through December 31, 2016. 

This record supersedes:New Energy Tax Incentives for Renewable Energy and Low-Emission Transport

Last modified: Fri, 17 Feb 2017 12:59:11 CET