Renewable Energy Tax Credit

The Tax Code contains production tax credit (PTC) and investment tax credit (ITC) incentives, and recent legislation has extended each to generally apply to projects placed in service before 2009.

Two of the most important incentives are:

• IRC Section 45, which provides a production energy tax credit to owners or operators of electric generation facilities that produce electricity from “qualified energy resources.” These include wind, biomass, geothermal, solar, irrigation, solid waste and hydropower. The PTC is based on the amount of electricity produced by the facility, and is currently 1.9 cents per kilowatt hour over a 10-year period.

and

• IRC Section 48, which provides an investment tax credit for solar projects. The ITC is equal to 30 percent of the cost of the facility.