Country:United States
Policy status:Ended
Date Effective:2004
Date Ended:9/30/09
Policy Type:Policy Support, Economic Instruments>Fiscal/financial incentives>Tax relief
Policy Target:Energy Sector>Electricity Generation>Renewable
Agency:US Treasury
Legal References:H.R. 1308, the Working Families Tax Relief Act of 2004, the American Jobs Creation Act of 2004, and most recently the Energy Policy Act of 2005 (§1301)

The Renewable Electricity Production Credit (REPC) is a per kilowatt-hour tax credit for electricity generated by qualified energy resources. It expired at the end of 2003 and was not renewed until 24 October 2004, as part of H.R. 1308, the Working Families Tax Relief Act of 2004, which extends the tax credit through 31 December 2005, and makes it retroactive to 1 January 2004. The REPC provides a 1.5 cents per kWh credit, adjusted annually for inflation, for wind, solar, closed-loop biomass, and geothermal. The adjusted credit amount for 2003 - 2005 is 1.8 cents per kWh. Energy Policy Act of 2005 (§1301) allows tax credit of 1.9 cents/kWh in 2005. Electricity from open-loop biomass, small irrigation hydroelectric, and municipal solar waste resources will receive half that rate -- currently 0.9 cents/kWh. The duration of the credit for closed-loop biomass and wind continues to be 10 years, while open-loop biomass, solar, geothermal, small irrigation hydro, and municipal solid waste resources are eligible for the credit for a 5-year period. Refined coal facilities will receive $4.375 per ton (indexed for inflation) for a 10-year term. The tax credit applies to facilities placed in service before 1 January 2006, with the exception of refined coal production facilities, which must be placed into service before 1 January 2009. The bills Title III also extends the tax credit for ethanol through 2010 and creates a new tax credit for biodiesel, effective through 2006. It also removes a disincentive for ethanol and biodiesel production by eliminating any impact on the Highway Trust Fund caused by the tax credits. Moreover, under the Working Families Tax Relief Act of 2004, a personal income tax deduction is available for purchases of clean fuel vehicles, such as for hybrids and electric vehicles. For hybrids, a $2,000 tax deduction continues for 2005, and is reduced to $500 in 2006 in its final year. Several tax benefits exist for ethanol and methanol from biomass that are used as a motor fuel or blended with gasoline. A permanent business investment tax credit of 10% exists for solar equipment that heats, cools, or generates electricity and for geothermal equipment that generates electricity.

This record is superseded by:Renewable Electricity Production Tax Credit (PTC)
This record supersedes:Renewable Electricity Production Credit (REPC)

Last modified: Fri, 16 May 2014 17:58:31 CEST