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Tax equity investments, and potentially other passive investments, in renewable energy just became that much easier to make.  Today, in response to a petition for declaratory order filed in January 2017 by a coalition of investors and project sponsors, FERC ruled that tax equity investments in public utilities does not trigger section 203 of the…

In what some commentators are calling the first of its kind, Maryland’s legislature has passed a bill that would allow taxpayers to claim a state income tax credit equal to 30% of the installed cost of an energy storage system.  The bill would cap the credit amount at $75,000 for a commercial installation or $5,000…

Wyoming has one of the nation’s best wind resources.  But if a contingent of state senators and representatives there have their way, electric utilities located in the state will be slapped on the wrist for using it (or other renewables, for that matter).  Senate File 71, which has been introduced in the Wyoming State Senate…

The Internal Revenue Service issued a private letter ruling this week to an individual owner of solar panels installed in an off-site net-metered community solar garden.  In the Ruling, the Service confirmed the individual’s eligibility to claim the residential income tax credit for 30 percent of qualified solar electric property expenditures pursuant to Section 25D of the Internal Revenue Code.

The Ruling is significant in several respects:

  1. it confirms that an individual who owns only some of the solar panels and other property comprising a community solar garden may claim the credit,
  2. it appears not to require direct tracking of the electricity produced by the taxpayer’s solar panels and, instead, permits allocation of the aggregate amount of electricity produced by the array based on the number of panels owned by the taxpayer, and
  3. it does not require the taxpayer to contractually agree with the utility that the taxpayer owns the electricity produced by the taxpayer’s panels until drawn from the grid at his residence.
    Continue Reading IRS Opens Door for Community Solar Investors to Qualify for Federal Tax Credits

A tentative ruling was issued yesterday in the related cases California Chamber of Commerce v. California Air Resources Board (ARB)  and  Morning Star Packing Co. v. ARB, pending before the Sacramento County Superior Court.  The cases challenge the legality of ARB’s cap and trade auctions under two theories:  (1) the cap and trade auctions…

As most of you are aware, Congress in the "American Taxpayer Relief Act of 2012" eliminated the "placed in service" deadline for purposes of the renewable energy tax credits.  In its place, Congress required for purposes of the production tax credit (section 45) and the elective investment tax credit (section 48), that taxpayers "begin construction"…

As we originally noted, the IRS guidance issued April 15 regarding the "start of construction" requirement for energy projects to qualify for PTC or ITC contained a "big surprise" regarding its definition of a binding contract. Unlike previous incentive programs, the guidance provided that contracts that limit damages to a specified amount, such as…

As you may have heard, the IRS and DOE have announced a second allocation of "Advanced Energy Project Tax Credits" – also known as 48C credits.  The 48C credit was enacted as part of the stimulus bill (ARRA) in 2009 and the first allocation was made in 2010.  Phase II is being held because a…

Congress yesterday passed the American Taxpayer Relief Act of 2012 (the Act), which averted the so-called “fiscal cliff.” The President is expected to sign the Act shortly.

The Act includes a number of energy-related tax provisions, including a one-year extension and modification of the production tax credit under Section 45 of the Internal Revenue Code (the PTC) for certain renewable energy facilities. The energy-related provisions in the Act include:

  • PTC Extensions and Modifications – The PTC is extended and modified for certain types of facilities. These extensions and modifications include:
    • In the case of wind, geothermal, landfill gas, trash, marine, and hydrokinetic facilities and certain closed-loop biomass, open-loop biomass, and qualified hydropower facilities, the PTC will apply if construction begins before January 1, 2014 (rather than if the facilities are placed in service before January 1, 2014). The Act does not specify what it means to begin construction for this purpose, although there are analogous authorities that have been adopted for other purposes that may be applied. Note, however, that a facility to which this extension applies may qualify for the PTC even if it is not placed in service before January 1, 2014.

       

    • The PTC for municipal solid waste facilities is modified to exclude from the definition of municipal solid waste certain paper that is commonly recycled and that has been segregated from other solid waste.

       

    • The election to claim the investment tax credit rather than the PTC for certain facilities is extended to apply to certain facilities with respect to which construction begins prior to January 1, 2014.

       

    • The PTC for Indian coal production facilities is extended for one year, to apply to sales of qualified production during the eight-year period (rather than the previous seven-year period) beginning on January 1, 2006.
       

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Continue Reading Fiscal Cliff Bill Includes PTC Extension and Other Energy-Related Provisions