The Senate Finance Committee on Tuesday gave the first go ahead to extending the Production Tax Credit (PTC) and other tax incentives to renewable energy developers, among other beneficiaries. The tax extension will apply to new wind, geothermal, biomass, landfill gas, hydroelectric and ocean energy projects, provided the projects commence construction by December 2016. The PTC that expired at the end of 2014 provided a rebate of $0.023/kWh for wind, geothermal, closed-loop biomass projects and $0.011/kWh for other eligible technologies that were under construction on the expiration date. The IRS has issued guidelines as to what constitutes commencement of construction for qualifying projects.
The extenders bill passed 23-3 with noteworthy and broad-based Republican support. Senators Pat Toomey (R-Pennsylvania) and Dan Coats (R-Indiana) led the opposition, calling for a headcount during the session to force members to individually state their support for the PTC extension. Their Republican colleagues however shook their heads in a silent plea to withdraw the requested vote, to which they acceded.
The vote in the Senate suggests that opposition to renewable tax programs is no longer de rigueur within the Republican Party. Many GOP districts benefit from wind and other renewable project development and employment. Broader Republican support will be tested when the bill goes to the full Senate for a vote. Tax legislation must originate in the House of Representatives. Therefore a parallel bill must be taken up by the House tax committee and move through the full House, with differences to then be reconciled through a joint conference.
The solar industry was hoping to join the process by including an extension of the Investment Tax Credit (ITC) as part of the extenders’ bill. However, Senator Orrin Hatch (R-Utah), Chairman of the Finance Committee, limited consideration only to expired tax measures. Solar will try to get another bite at the apple when the extenders bill reaches the floor. Chairman Hatch could also offer an amendment before the bill is submitted to the full chamber; however, this possibility seems unlikely as it could upset the balance reached.