On April 3, the IRS announced an increase in the value of the
production tax credit (PTC) for wind, geothermal, and closed-loop
biomass projects, from 2.2 cents per kilowatt-hour to 2.3
cents per kilowatt hour. This increase in the PTC value
may be especially valuable for Midwestern wind and biomass
projects.
The PTC remains at 1.1 cents per kilowatt-hour for open-loop
biomass, waste to energy, qualified hydropower, and marine and
hydrokinetic energy.
This announcement follows the important extension of the PTC for
renewable projects that begin construction before the end
of 2013. Before this extension, wind projects needed to be
completed before the end of 2012, and biomass and waste-to-energy
projects needed to be completed before the end of 2013. Godfrey
& Kahn continues to monitor IRS and Treasury announcements for
anticipated guidance on the "begin construction"
standard. We will provides updates regarding this standard as soon
as guidance is available.
All of the above types of renewable energy projects can take
advantage of a 30% investment tax credit in lieu of the PTC.
Depending on the type of project, the 30% investment tax credit may
provide substantially greater value than the PTC.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
