House seeks clarity on renewable energy tax credit

By Anna Simet | February 04, 2013

Among several biofuels industry tax credits extended in the American Taxpayer Relief Act of 2012 are provisions that allow biomass facilities to continue to qualify for renewable energy production tax credits (PTC), but vague language in the bill has prompted the U.S. House to request clarity from the Internal Revenue Service and the U.S. Treasury.

The tax bill includes language that alters the date by which a renewable energy facility can qualify for a PTC; instead of having to begin producing energy by a “placed-in-service” date of Dec. 31, 2013, new facilities can become eligible for the credits based on the date they begin construction. The new deadline is Jan 1, 2014.

The act does not specify what criteria will need to be met in order to be considered to have begun construction, however.  

On Feb. 1, 30 members of the House Sustainable Energy and Environment Coalition sent a letter to the IRS and Department of the Treasury encouraging them to act swiftly in issuing guidance to clarify the eligibility qualifications. “We are supportive of this critical change and encourage the guidance to ensure inclusion of all projects begun in 2013,” the letter states. “We believe this will facilitate increased electricity generation from clean energy sources like wind, geothermal, biomass, and hydropower.  However, until the IRS provides new guidance, it remains unclear to investors and the renewable industry what construction threshold must be met by an individual project in order to claim the incentive.”

Click here to read the full text of the letter.