United States of America

Consolidated Appropriations Act, 2016

Legislative
Law
Passed in 2015
The Consolidated Appropriations Act, 2016, signed into law on 18 December 2015, renews tax credit programs for wind and solar electricity generation and incorporates a phase-out schedule for these support programs, providing some stability for the renewable energy market.
The Act extends the 'production tax credit' (PTC) for wind facilities provided by the U.S. Internal Revenue Code per kilowatt-hour of renewable electricity production for facilities beginning construction before 1 January 2020. This change applies retroactively from 1 January 2015 (when the previous guarantee for PTC originally expired). The Act also includes a phase-out provision, under which the volume of PTC depends on beginning of the construction of the wind facilities: 20% reduction of PTC if construction begins in 2017, 40% reduction of PTC if construction begins in 2018, and 60% reduction of PTC if construction begins in 2019.
The Act allows wind facilities brought into service before 1 January 2020 to choose the 'investment tax credit' (ITC) program, based upon a percentage of each energy property brought into service during any taxable year, instead of the PTC program. The ITC program applies similar percentage-based phase-out support as the PTC program.
The Act extends the ITC program for solar energy until 2021, with a percentage-based phase-out provision. The energy credit reduces from 30% to 26% percent for facilities upon which construction begins after 31 December 2019 and further to 22% percent for facilities upon which construction begins after 31 December 2020. It is estimated that the solar ITC provision of the Act will add '220,000 new jobs by 2020, cut 100 million tons of emissions, and lead to $133 billion invested in the U.S. economy' (http://www.seia.org/news/seia-celebrates-extension-itc).

Documents
from the Grantham Research Institute
from the Grantham Research Institute
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