Tax incentives signed into law
Package includes five-year extension of RE tax credits
The US Congress passed a government spending and tax package that includes a five-year extension of renewable energy incentives and president Barack Obama promptly signed the bill into law.
Democrats agreed to end a 40-year ban on crude oil exports in exchange for Republican support for wind and solar power tax credits, among other concessions.
The $650bn tax bill renews around 50 business and individual tax breaks that have expired or are about to lapse, including a five-year extension for production and investment tax credits.
The multi-year extension gives renewable energy developers the predictability needed to plan and build new projects, said Pattern Energy CEO Mike Garland, who is also chairman of the American Wind Energy Association.
“Pattern will be expanding its project development for the coming year because of the PTC extension,” said Garland.
“Having PTCs for five years will allow us to make more supply commitments and build more projects, creating more jobs. It also allows us to work with the turbine vendors to lower the cost of our projects and minimize the economic impact of phasing down of the credits.”
The incentives are extended for 2015 and 2016, and continue at 80% of present value in 2017, 60% in 2018, and 40% in 2019. Wind projects will qualify as long as they start construction before the end of the period.
The PTC pays 2.3 cents/kWh during the first 10 years of wind farm operation and the ITC is worth up to 30% of the costs of developing and building wind projects.
Image: US Capitol (US government)