On December 18, 2015, President Barack Obama signed into law the Consolidated Appropriations Act, 2016 (H.R. 2029) (the Act). The Act includes multi-year extensions of the Production Tax Credit (the PTC) under Internal Revenue Code (IRC) Section 45 and the Investment Tax Credit (the ITC) under IRC Section 48 for wind and solar projects—both of which are gradually phased out. The Act, however, did not extend the ITC for other types of renewable energy property, including fuel cell power plants, stationary microturbine power plants, small wind energy property, combined heat and power system property, and geothermal heat pump property. Read further discussion of the Act’s extension of renewable energy tax incentives.
Congressional leaders have indicated that this omission was an oversight. On December 18, Senate Minority Leader Harry Reid (D-NV) acknowledged the mistake, noting that the Act:
[I]nadvertently only extends the credit for solar energy technologies, rather than all of the technologies currently eligible to receive the credit. The intention of the agreement that I reached with the majority leader was to extend the section 48 Investment Tax Credit for all of the eligible technologies for 5 years and to treat each technology eligible for a 30 percent credit the same with respect to a phase down in the years 2020 and 2021. The permanent 10 percent credit for eligible technologies under section 48 will remain in place. The majority leader and I hope to address this early next year.
161 Cong. Rec. S8850 (daily ed., Dec. 18, 2016). House Minority Leader Nancy Pelosi (D-CA) made a similar comment in a press conference following the vote.
Currently the renewable energy industry is seeking to correct the mistake and to extend the credits to all presently creditable renewable activities. As developments occur, we will update this blog.