Renewable Energy Tax Credits News Briefs - October 2013

Tuesday, October 1, 2013

The Internal Revenue Service (IRS) issued Notice 2013-60 to clarify beginning of construction requirements for the renewable energy production tax credit (PTC) or the investment tax credit (ITC). Notice 2013-60 provides a method for taxpayers to satisfy both the continuous construction and continuous efforts tests. It also makes the master contract provision in Notice 2013-29 applicable for safe harbor purposes and allows taxpayers to transfer a facility after construction has begun without disqualifying it for the PTC or ITC. A copy of Notice 2013-60 can be found online at www.energytaxcredits.com.

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Iowa will have 448 wind turbines installed across five counties thanks to federal wind subsidies. MidAmerican Energy Company, a subsidiary of MidAmerican Energy Holdings, is overseeing the turbine installation. The power plants are expected to generate up to 1,050 megawatts (MWs) of power by 2015. At press time, construction on the wind farms was set to begin in September in Grundy, Madison, Marshall, O’Brien and Webster counties. The MidAmerican subsidiary could qualify for production tax credits of $23 per megawatt hour of wind power produced. Almost 460 jobs will be created, with 50 being permanent. The power plants are also expected to provide a rate reduction of $10 million per year by 2017.

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Greenwood Energy purchased 5.5MW of solar energy projects in August. The North American clean energy division of the Libra Group purchased the projects from Borrego Solar Systems Inc., a designer, installer and financier of grid-tiered solar photovoltaic (PV) systems. The projects will be built in the cities of Walpole and Gardner, Mass. Also included in the purchase was a 3MW system in Walpole. The projects have just entered the construction phase.

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On August 16, the House Committee on Ways and Means received a bipartisan letter from Reps. Raul Ruiz, D-Calif., Jon Runyan, R-N.J., and Earl Blumenauer, D-Ore., advocating for renewable energy on tax reform. Signed by 60 Democratic and Republican members, the letter covered topics such as job growth in the industry, domestic manufacturing, policy uncertainty and tax reform legislation. The letter stated that there were an estimated 3.4 million green jobs in the United States and that the country saw a 34 percent decrease in renewable energy last year because of policy uncertainty. The letter also said that sources of renewable energy are critical to America’s energy future and that as the committee develops tax reform legislation, the committee should include policies that promote America’s renewable energy economy.

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U.S. Geothermal Inc. has begun drilling for the second phase of the San Emidio project in Washoe County, Nev. U.S. Geothermal Inc., a renewable energy company focused on the development, production and sale of electricity from geothermal energy, made the announcement Sept. 4. Seven wells have been permitted in the second phase, with the first well to be drilled about two miles north of the operating San Emidio Phase I power plant. This phase requires drilling new production and injection wells and upgrading transmission. Up to 11MW (net) may be produced from the wells. Phase I was completed in May 2012, when an existing 3.6MW plant was replaced with a new 9MW power plant. Nearly $1 million in grant funds from the Department of Energy (DOE) remain for the second phase of the project. If the drilling program is successful, the power plant is expected to be operational in 2015.

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On Aug. 29, the DOE announced the investment of $16 million to harness wave and tidal energy. The DOE will invest in 17 projects. The department’s research identified up to 1,400 terawatt-hours of potential generation per year, with one terawatt-hour of electricity being enough to power 85,000 homes. $13.5 million went to eight projects to build wave and tidal devices for energy capture. $2.4 million went to nine projects that will gather and analyze data. The projects are located in Massachusetts, North Carolina, Virginia, New Jersey, Tennessee, Washington, Oregon and Florida, with several projects in Maine and California.

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