This article comes from the Chadbourne newsletter written by Keith Martin.
Production tax credits for wind, geothermal, and closed-loop biomass projects will increase slightly in 2017 from 2016 levels, the Internal Revenue Service said in late May. Credits for producing refined coal are increasing slightly in amount.
The credits for generating electricity from wind, geothermal steam or fluid or closed-loop biomass (plants grown for use as fuel in power plants) are 2.4¢ per kilowatt-hour in 2017. They will remain unchanged at 1.2¢ per kilowatt hour for generating electricity from open-loop biomass, landfill gas, incremental hydropower and ocean energy.
The credits are adjusted each year for inflation as measured by the GDP price deflator. They run for 10 years after a project is originally placed in service.
The credits phase out if contracted electricity prices from a particular resource reach a certain level. That level in 2017 is 12.6336 ¢/kWh. The IRS said there will not be any phase out in 2017 because contracted wind electricity prices are 4.55 ¢/kWh going into 2017. It said it lacks data on contracted prices for electricity from the other energy sources.
Production tax credits for producing refined coal are $6.909 a ton in 2017. Refined coal is coal that has been treated with chemicals to make it less polluting than regular coal. The IRS said there will not be any phase-out of refined coal credits in 2017. The refined coal credit phases out as the reference price for raw coal moves above 1.7 times the 2002 price of raw coal. The 2017 reference price is $51.09 a ton. A phase out would have started at $85.64 per ton.
The tax credit amounts are in IRS Notice 2017-33.