Renewable Energy Tax Credit News Briefs – November 2019

Thursday, November 7, 2019

The 2019 U.S Solar Market Insight Report from Wood Mackenzie and the Solar Energy Industries Association reported that the contracted U.S. utility solar pipeline hit 37.9 gigawatts. The report states that 55 percent of utility-scale projects in 2019 were the result of solar energy’s economic competitiveness with other power generation sources. The total installed U.S. PV capacity is projected to more than double over the next five years with annual installations reaching 17.6GWdc in 2021 before the final phasedown of the federal investment tax credit.

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The U.S. Appeals Court for the Federal Circuit affirmed Sept. 26 a decision made by the U.S. Court of Federal Claims in the Alternative Carbon Resources LLC V. United States case. The decision states that Alternative Carbon Resources cannot show that it was entitled to claim the alternative fuel mixture credits under Internal Revenue Code Section 6426, nor can it show that it had reasonable cause to do so.

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Reps. James Langevin, D-R.I., and Peter Welch, D-Vt., Sept. 12 introduced the Building Efficiently Act of 2019 (H.R. 4317) which would extend through 2020 and expand the IRC Section 45L new energy-efficient home credit. It would create a new tax credit worth up to 3.3 percent of the total construction cost for residential rental properties that reduce energy use by 40 percent or more and extend the Section 179D commercial property energy efficiency deduction–which can be used for multifamily housing–through 2020. The bill includes provisions not to reduce low-income housing tax credit basis by the amount of Section 45L credit, the Section 179D deduction and the renewable energy ITC.

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The Internal Revenue Service published a noticed in the Federal Register Sept. 12 seeking comments on Notice 2010-54, which provided guidance for claiming the production tax credit (PTC) for refined coal. The notice also altered the definition of refined coal and allows for certain processing of utility-grade coal to be taken into account for determining emissions reductions.

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Eight major wind-energy developments have been approved over a 13-month period in South Dakota. This is a $2.6 billion investment that will bring more than 700 new turbines to the state by the end of 2020. Wind-energy developers are bringing projects to fruition as quickly as possible to obtain the financial benefits of the PTC for new wind projects before they begin phasing out in 2020.

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A paper drawn from a survey of wind industry professionals to clarify trends in the expected life of land-based wind power plants in the United States was published in September. The paper reports that wind professionals expect the assumed useful life of wind projects has increased over time to almost 30 years. The expected useful life of a project is the period of time in which expected costs and revenues are assessed to determine a project’s economic viability. A longer assumed life may enhance the expected long-term profitability of a project. From a planning perspective, longer lifetimes may enable a lower levelized cost of wind energy by recovering capital costs over additional years of electricity production.

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Press release form Rystad Energy Sept. 19 reported that more electricity will come from wind than coal in the state of Texas by 2020. Installations are driven by planned capacity additions and the lowering production cost brought on by the PTC that is set to phase out at the end of 2019. A levelized cost of electricity of $0.06 per kilowatt-hour in 2018, according to the International Renewable Energy Agency, means that the cost of wind generation is down to the lower cost limit of fossil fuel power. 

Journal Category: 
Renewable Energy Tax Credits
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