Making Sense of the
Tax Credit Extensions
for Wind, Solar (and Bioenergy, Too)
Tuesday December 15 was a good day for U.S.
renewable energy companies. In a landmark deal that could
mark the first time the Senate and House Republicans and
Democrats under Barack Obama were able to compromise on
anything at all, the two parties released an omnibus spending
bill that lifts the 40-year U.S. oil export ban and gives a five-year
extension of renewable energy tax credits for wind and solar.
Solar Industry Exuberant
The bill extends the Investment Tax Credit (ITC) for solar
until 2021. It was originally expected to sunset at the end of
2016, which was forcing developers to rush to finish projects.
In a session during the Renewable Energy World Conference
and Expo in Dec. 2014, Julie Ungerleider of Coronal Group
explained that because of the hard stop that the ITC created,
solar projects that were not already “fully baked” were
unlikely to be able to be built by 2016. She said material
shortages were rampant with the rush to build now. This
extension should relieve some of that pressure.
The ITC will be extended until December 31, 2019 in
its current form. After that projects that start construction
in 2020 and 2021 will receive 26 percent and 22 percent,
respectively. All projects must be completed by 2024 to
obtain these elevated ITC rates. For residential solar, a similar
tax credit phase-out applies until December 31, 2021, after
which the tax credit scheme ends.
by Jennifer Runyon, Chief Editor, Renewable Energy World
is chief editor of
com and Renewable
Energy World magazine,
and/or editing columns,
features, news stories and
blogs for the publications.