Congress recently passed a bill to extend the production tax credits (PTC) for wind power development projects. All projects that start construction by December 2016 will receive 100% of the PTC, which will drop by 20% per year to 40% for projects started by December 2019.
The budget deal also extended a 30% investment credit (ITC), which benefits solar production. This extension offers a 30% tax credit through 2019, winding down to 10% over the following 4 years.
The extended PTC continues the favorable pricing for large-scale wind renewables purchased through Power Purchase Agreements (PPAs), which is currently worth $23 per megawatt-hour of electricity produced. The extended ITC will continue to benefit solar production, as the credits will not begin to get phased out until 2020.
Together, these credit extensions are expected to facilitate continued growth in renewable energy purchasing, both through PPAs and renewable energy certificates.
To read more about Congress’s extension of renewable tax credits, click here.