Renewable Electricity Production Tax Credit (PTC) (Federal)

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Summary

Last modified on February 12, 2015.

Financial Incentive Program

Place United States

Name Renewable Electricity Production Tax Credit (PTC)
Incentive Type Corporate Tax Credit
Applicable Sector Commercial, Industrial
Eligible Technologies Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Municipal Solid Waste, Anaerobic Digestion, Small Hydroelectric, Tidal Energy, Wave Energy, Ocean Thermal
Active Incentive Yes

Implementing Sector Federal
Energy Category Renewable Energy Incentive Programs
Amount 0.023/kWh for wind, geothermal, closed-loop biomass; 0.011/kWh for other eligible technologies. Generally applies to first 10 years of operation.

Carryover Provisions Unused credits may be carried forward for up to 20 years following the year they were generated or carried back 1 year if the taxpayer files an amended return.


Eligible System Size Marine and Hydrokinetic: Minimum capacity of 150 kW

Agricultural Livestock Waste: Minimum capacity of 150 kW




Expiration Date Varies by technology

















Program Administrator U.S. Internal Revenue Service
Website http://www.irs.gov/pub/irs-pdf/f8835.pdf
Date added to DSIRE 2002-03-11
Last DSIRE Review 2014-11-14



References DSIREDatabase of State Incentives for Renewables and Efficiency[1]


Summary

Note: This credit expired at the end of 2013. Projects that were not under construction prior to January 1, 2014, are ineligible for this credit. See below for more information about determining when construction has commenced on a project.


The federal renewable electricity production tax credit (PTC) is a per-kilowatt-hour (kWh) tax credit for electricity generated by qualified energy resources and sold by the taxpayer to an unrelated person during the taxable year. Originally enacted in 1992, the PTC has been renewed and expanded numerous times, most recently by the American Recovery and Reinvestment Act of 2009 (H.R. 1 Div. B, Section 1101 & 1102) in February 2009 (often referred to as "ARRA") and the American Taxpayer Relief Act of 2012 (H.R. 6, Sec. 407) in January 2013.


The January 2013 legislation revised the credit by: (1) removing "placed in service" deadlines and replacing them with deadlines that use the beginning of construction as a basis for determining facility eligibility; (2) extending the deadline for wind energy facilities by one year, from December 31, 2012, to December 31, 2013; (3) extending the permission for PTC-eligible facilities to claim the Investment Tax Credit (ITC) through 2013 (also using the start of construction rather than placed-in-service date as a reference); and (4) revising the definition of the term "municipal solid waste" to exclude "paper that is commonly recycled and which has been segregated from other solid waste.” The definitional change for municipal solid waste applies to electricity produced and sold after the enactment date of the legislation (January 2, 2013) in taxable years ending after that date.


Credit Amount


The tax credit amount is $0.015 per kWh in 1993 dollars for some technologies and half of that amount for others. The amount is adjusted for inflation by multiplying the tax credit amount by the inflation adjustment factor for the calendar year in which the sale occurs, rounded to the nearest 0.1 cents. (For 2014, the inflation adjustment factor used by the Internal Revenue Service (IRS) is 1.5088.)


The table below outlines the credit amount as it applies to different resource types. The table includes changes made by H.R. 8 in January 2013, and the inflation-adjusted credit amounts are current for the 2014 calendar year, as published in the IRS Notice 2014-36.


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Incentive Contact

Contact Name Public Information - IRS
Department U.S. Internal Revenue Service

Address 1111 Constitution Avenue, N.W.

Place Washington, District of Columbia
Zip/Postal Code 20224
Phone (800) 829-1040



Website http://www.irs.gov
     
     

Authorities (Please contact the if there are any file problems.)

Authority 1: 26 USC § 45

Date Enacted 1992 (subsequently amended)


Authority 2: H.R. 8 (American Taxpayer Relief Act of 2012)
Date Effective 2013-01-02
Date Enacted 2013-01-02


Authority 3: IRS Notice 2013-29

Date Enacted 2013-04-15


Authority 4: IRS Notice 2013-60

Date Enacted 2013-09-20


Authority 5: IRS Notice 2014-46

Date Enacted 2014-08-08


Authority 6: IRS Notice 2014–36
Date Effective 2014-01-01
Date Enacted 2014-05-27
Expiration Date 2014-12-31













  • Incentive and policy data are reviewed and approved by the N.C. Solar Center's DSIRE project staff.[1]

References

  1. 1.0 1.1  "Database of State Incentives for Renewables and Efficiency"