The IRS today released Announcement 2022-23, which sets forth the new rate for the production tax credit (PTC) under Section 45 for facilities that are placed in service after December 31, 2021. The rate is 2.75 cents per kWh for a wind facility (i) with a maximum net output of less than 1 MW, (ii)
On April 14, 2022, the US Internal Revenue Service (IRS) published a notice that provides the inflation-adjustment factor and reference price for the calculation of renewable electricity production tax credits (PTCs) under Internal Revenue Code (IRC) section 45 for calendar year 2022, as well as the amount of the PTC for 2022 as adjusted for inflation.
On May 5, 2022, the IRS issued corrections to this notice, revising the inflation-adjustment factor from the initially released 1.8012 to 1.7593 and reducing the PTC amounts accordingly.Continue Reading UPDATED: IRS Releases 2022 Section 45 Production Tax Credit Amounts
On May 24, 2021, the US Internal Revenue Service (IRS) released Notice 2021-32, which provides the inflation-adjustment factors and reference prices for the calculation of renewable electricity production tax credits (PTCs) under Internal Revenue Code (IRC) section 45 for calendar year 2021.
The notice provides that the PTC for electricity produced from wind, as well…
On May 12, 2020, the US Internal Revenue Service (IRS) released a notice providing the inflation-adjustment factors and reference prices for the calculation of renewable electricity production tax credits (PTCs) under Internal Revenue Code (IRC) section 45 for 2020.
Continue Reading IRS Releases 2020 Section 45 Production Tax Credit Amounts
On June 6, 2019, the US Internal Revenue Service (IRS) published a notice providing the inflation-adjustment factors and reference prices for the calculation of renewable electricity production tax credits (PTCs) under Internal Revenue Code (IRC) section 45 for 2019.
The notice provides that the PTC for electricity produced from wind, as well as closed-loop biomass and geothermal energy, increased from 2.4 cents per kilowatt-hour (kWh) to 2.5 cents per kWh for 2019. The notice also includes the PTC amounts for electricity produced from other qualified energy resources. Specifically, the PTC for electricity produced from open-loop biomass, landfill gas, trash, qualified hydropower, and marine and hydrokinetic resources remains at 1.2 cents per kWh for 2019. The PTC for refined coal also increased from $7.03 per ton to $7.173 for 2019.
Continue Reading IRS Releases 2019 Section 45 Production Tax Credit Amounts
Today, the House voted 227 to 303 in favor of the tax reform bill agreed to by the conference committee. No Democrats voted for the House bill, and 12 Republicans from high tax states voted against it. The Senate is expected to vote later this evening to approve it; it is possible that the president could sign the bill as early as tomorrow.
The enacted legislation is expected to be identical to the bill approved by the conference committee. Our analysis of the conference committee’s bill’s impact on the renewable energy market is below, which is followed by a chart that summarizes the relevant provisions in each of the three bills.
Continue Reading House Passes Tax Reform & the Impact of Tax Reform on the Renewable Energy Market
The Stratton Report has published an interview with me that discusses the pending tax reform legislation: http://strattonreport.com/longforms/davidburtonmayerbrown/.
Our article Proposed GOP Tax Reform Would Curtail Tax Incentives for Wind and Solar is available from North American WindPower (no subscription required). The article includes a discussion of the politics of the Senate passing tax reform and a discussion of market implications; however, the discussion of the specific changes to the Internal Revenue Code…
On Thursday, November 2, Republicans in the US House of Representatives released their proposed tax reform legislation, providing for massive alterations to tax law. The proposed legislation would trim tax benefits applicable to the wind and solar industries, while broadening the scope of the application of the “orphaned” energy tax credit. Further, it would eliminate the tax credit for electric vehicles starting in 2018. The proposed legislation is subject to further amendments and may not be enacted into final legislation.
Continuity of Construction. Pursuant to current law, the production tax credit (PTC) and investment tax credit (ITC) phase out over time, with the level of credit for which a renewable energy project qualifies being based on when the project began construction relative to various deadlines that determine the level of PTC or ITC. Under the proposed legislation, for any renewable energy project to qualify for a specific level of PTC or ITC, there would need to be continuous construction on such project from the deadline for the specific PTC or ITC level through the date the project is placed in service.
The concept of continuous construction does not exist in the current PTC and ITC provisions of the Tax Code. It was adopted by the IRS as an administrative matter in Notice 2013-29. However, the IRS later, under Notice 2016-31, created a safe harbor to enable projects to avoid application of the IRS’s “continuity” requirement. To qualify for the safe harbor, a project must be placed in service within four calendar years after the end of the calendar year in which construction began. The proposed legislation would effectively codify the continuity requirement and eliminate the safe harbor. Further, these changes appear to apply to all projects that have not been placed in service as of the date of enactment of the proposed legislation, regardless of whether construction of such projects began before enactment.
Continue Reading GOP Tax Bill Proposes Changes to the Renewable Energy Industry’s Tax Incentives