The Internal Revenue Service recently published its annual notice providing the inflation adjustment factors and reference prices used in determining the amount of production tax credits (PTCs) for renewable energy and refined coal production under Section 45 of the Internal Revenue Code of 1986, as amended. The 2019 inflation adjustment factor and reference prices apply to calendar year 2019 sales of kilowatt hours of electricity produced in the United States (or a possession thereof) from qualified energy sources.
Pursuant to the calculation required by Section 45(b)(2), the 1.5 cents statutory amount in Section 45(a)(1) is adjusted annually for inflation, by multiplying such amount by the inflation adjustment factor for the calendar year in which the sale occurs. The inflation adjustment factor for calendar year 2019 for qualified energy resources is 1.6396. That means the inflation-adjusted amounts of PTCs available for sales of electricity increased from 2.4 cents per kWh for 2018, to 2.5 cents per kWh for 2019.