Renewable Energy Tax Credits Extended as Far as 2016
On October 3, 2008, President Bush signed into law HR 1424, which includes the Energy Improvement and Extension Act of 2008. The Act extends the Production Tax Credit and Investment Tax Credit that are essential to the growth of renewable energy in the United States. The looming expiration of those credits had the renewable energy industry buzzing with speculation.
October 03, 2008
The Energy Improvement and Extension Act of 2008 contains the extension of the production tax credit and investment tax credit for renewable energy systems. It extends the PTC placed-in-service date for wind energy facilities until December 31, 2009, and for some other renewable-energy facilities through 2010. Congress also expanded the PTC to include some marine and hydrokinetic renewable energy facilities placed in service by the end of 2011.
The Act extends the ITC placed-in-service deadline for solar until December 31, 2016. Fuel cell and microturbine property have the same expiration timeframe as solar. Congress expanded the ITC to include combined heat and power (CHP) systems, some small wind energy systems, and geothermal heat pump systems.
Congress extended the energy-efficient commercial buildings deduction and the new energy efficient home credit, as well. One key provision in the legislation is the extension of the Commercial Building Tax Deduction (CBTD) through 2013. This allows building owners to claim a deduction of up to $1.80 per square foot for HVAC, lighting or envelope upgrades resulting in 50 percent savings over ASHRAE Standard 90.1-2001. This five-year extension allows for longer planning schedules often needed in design and construction.
In addition, HR 1424 allows the ITC to offset alternative minimum tax liability, and increases the amount of biodiesel fuel credits through 2009. It authorizes new, clean renewable energy bonds and qualified energy conservation bonds. Congress extended a tax-exempt bond program to designated green building and sustainable design projects on brownfields.
Thanks to the energy law offices of Stoel Rives and ASHRAE for contributing information for this article.