As Capitol Hill debates the permanent fate of the production tax credit for renewable energy projects, lawmakers have four main options if they choose to phase out the provision: (1) the existing production tax credit (PTC) language requires that the credit be reduced when the price for wind power exceeds an inflation-adjusted value, triggering a phaseout; (2) a straight-line phaseout involves a reduction spread over a five-year period, with a 20 percent reduction each year; (3) a broad tax overhaul bill providing a 10 percent annual reduction over five years, with no PTC afterward; (4) a market-linked approach that tailors the PTC reduction to allow the industry to remain competitive with new natural gas power plants. See the full Congressional Research Service report here.
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