Extended renewable energy tax credits have been included in a $1.4 trillion federal spending package alongside a $900 billion COVID-19 virus relief spending bill. The wind production tax credit (PTC) has been extended by one additional year, and a new 30% investment tax credit has been created for offshore wind projects that start construction through 2025. The solar industry also received a limited extension of its investment tax credit.
The PTC will continue to apply at 60% for any project that begins construction by the end of 2021. The law previously called to reduce the PTC to 40%. The wind PTC is still scheduled to drop to 0% starting in 2022.
“With 13% of the clean energy workforce out of a job this holiday season due to COVID-19, we are grateful that lawmakers included commonsense emergency relief measures for the renewable sector in this package,” said Gregory Wetstone, President and CEO of the American Council on Renewable Energy (ACORE). “Extending the solar and wind tax incentives and making the investment tax credit available for offshore wind projects is a bipartisan vote of support for the renewable industry and the hundreds of thousands of Americans building our clean energy future. These policies will help get people back to work, accelerating our economic recovery and achieving greenhouse gas emissions reductions that scientists tell us are necessary to protect our climate.”
The new offshore wind ITC allows for a 30% credit on projects that begin construction before 2026. That would be perfect timing for many of the country’s scheduled offshore wind projects, which are planning to get started around 2024.
“This bipartisan agreement is a major win for American energy consumers, providing more opportunities for them to receive reliable, zero-carbon, and pollution-free electricity in their local communities,” said Heather Zichal, CEO of the American Clean Power Association (ACP). “We also applaud Congress for recognizing the enormous potential of offshore wind, America’s largest untapped electricity source, as a brand-new provider of jobs for American workers and clean power for American families.”