Congress Poised to Extend Tax Credits for Renewable Energy Projects

By: Kenneth C. Foltz, Sr., Esq.

WASHINGTON, D.C. – The path to reaching a compromise to break the stalemate on the Federal budget is being paved by extending current with tax credits extensions and lifting the ban on the exportation of crude oil exports. The House of Representatives is are on the verge of passing two bills, the omnibus spending bill (favored by Democrats) and the tax credit extenders bill (favored by Republicans). This bipartisan compromise avoids a government shutdown and gives new life to two significant tax credit programs used as a catalyst for wind and solar renewable energy projects.

If these bills are passed as proposed, the Production Tax Credit (PTC) and Investment Tax Credit (ITC) will be extended in accordance with these general terms:

Production Tax Credit – Wind

The deadline for projects to be eligible for 100% PTC credits would be extended to December 31, 2016 (subject to start of construction requirements). For projects that would commence in 2016, these projects can elect the 10-year credit – currently at 2.3 cents a kilowatt-hour of electricity generated or the onetime 30% investment credit. The credit eligibility would be reduced by 20% annually for projects that would start construction in 2017, 2018, 2019 and 2020. This extension should generate investment in new wind development projects.

Incentive Tax Credit – Solar

The deadline for solar projects to be eligible for the 30% investment credit would be extended to December 31, 2019. The eligibility for the credit will scale back 4% annually until 2023. Projects must be placed into service by December 31, 2023 or the projects will only be eligible for 10% credit.

Jim Spencer is President and CEO of EverPower, a developer, owner and operator of utility grade wind projects. He provided his take on the deal to Leech Tishman: “Congress recognizes that wind power is an important element of our current and future energy infrastructure. A multiyear extension of the PTC and ITC credits will spur private investment in projects. The PTC 100% extension for 2016 should drive developers to commence projects in the next 12 months, so this is not a bad result for the industry.”

Lawyers at Leech Tishman represent both alternative and traditional energy companies. They have the expertise, knowledge and relationships to assist energy companies via practices that span Energy, Real Estate, Corporate Law, Taxation and Government Relations. This year the “Consolidated Appropriations Act” is 2009 pages and the tax extender bill is nearly 300 pages. For more information on alternative energy provisions of these bills or how Leech Tishman can help your company, please contact Kenneth C. Foltz, Partner, Leech Tishman: kfoltz@leechtishman.com or 412-261-1600.

Leech Tishman is a firm dedicated to providing full-service commercial legal services to individuals, businesses, and institutions. We combine a deep understanding of our clients and their businesses with skilled legal counsel to find solutions. Leech Tishman offers legal services in alternative dispute resolution, bankruptcy & creditors’ rights, construction, corporate, employee benefits, employment, energy, environmental, safety & toxic torts, estates & trusts, government relations, immigration, insurance coverage & corporate risk mitigation, intellectual property, internal investigations, international legal matters, litigation, real estate, and taxation. Headquartered in Pittsburgh, PA, Leech Tishman also has offices in Chicago, Los Angeles, New York and Wilmington, DE. For more information call 412.261.1600 or visit us at www.leechtishman.com.