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Wind and Solar Energy Tax Credits Extended

Alert
12.21.2015
By Allison Woodbury

On Friday, December 18th, President Barack Obama signed into law the $1.1 trillion Consolidated Appropriations Act of 2016, which extended and also phased down certain renewable energy investment tax credits (ITC) and production tax credits (PTC) through 2021.

Wind ITC (currently 30% of eligible basis) and PTC (calculated based on energy production) have been extended to projects beginning construction before January 1, 2020.

The phase-down of the credit occurs as follows:

  1. For projects beginning construction after December 31, 2016 and before January 1, 2018, the credit is reduced by 20%.
  2. For projects beginning construction after December 31, 2017 and before January 1, 2019, the credit is reduced by 40%.
  3. For projects beginning construction after December 31, 2018 and before January 1, 2020, the credit is reduced by 60%.

Solar ITC (currently 30% of eligible basis) has been extended to projects beginning construction before January 1, 2022. The phase-down of credit occurs as follows:

  1. For projects beginning construction after December 31, 2019 and before January 1, 2021, the credit is reduced to 26% (total credit).
  2. For projects beginning construction after December 31, 2020 and before January 1, 2022, the credit is reduced to 22% (total credit).

Additionally, a placed in service deadline has been set for solar projects; for projects beginning construction before January 1, 2022, but not placed in service before January 1, 2024, the credit is reduced to 10% (total credit).

For more information on the Consolidated Appropriations Act and the effects on renewable credits, please contact Allison Woodbury or your usual Stinson Leonard Street LLP contact.

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