Renewable Energy Tax Credits Receive a Multiyear Extension in a Congressional Omnibus Bill
December 16, 2015, by EBD Hydro
Congressional leadership reached an agreement to support an omnibus spending and tax bill that reflects a global agreement among the leaders to continue to support clean energy development. For the taxpayers, this is a plus as the Federal Production Tax Credit (PTC) and the Investment Tax Credit (ITC) are tax incentives designed to provide funding after the completion of a facility. In other words, the spending is based on accountability before the funds are paid out - a much needed plus in the use of taxpayer funds.
For independent renewable energy developers, the ITC and PTC have been two very important components in clean energy projects. The unfortunate truth is that the avoided cost rates (ACRs) paid by the public utilities have been going down over the years while consumer costs for power have continued to rise. So, while you may be paying more for your power now than you were three years ago, the amount of money being dedicated to supporting clean, renewable resources vs. environmentally harmful coal energy has been decreasing.
This is an ongoing debate being worked through by several channels, although it has seen little success for clean energy. Hopefully, the passing of this new Bill will mean more opportunities. Even though tax credits are "after the fact" funds (meaning a developer has to be able to independently finance a project without any financial aid or support), their continuation will hopefully provide lending institutions, private corporations (like data centers), municipalities, and other agencies with the incentives to finance successful independent developers like EBD as the tax incentives remain a guarantee!