Extension of tax credits
On December 15, 2015, the Obama administration signed a bill for the extension of tax credits to renewable energy. The Consolidated Appropriations Act extended tax credits to photovoltaic, solar thermal, wind, geothermal, closed-loop biomass, and other eligible technologies.
While solar energy received an extension to the 30% investment tax credit (or ITC), wind power received an extension to the 2.3%-per-kilowatt-hour production tax credit (or PTC). Meanwhile, geothermal, marine energy, and small hydropower received one-year extensions to their 30% ITCs.
The biggest beneficiaries of this act were solar and wind energies, for whom these tax credits will last until the end of this decade.
Why is this important?
With the election looming in 2016, there are concerns regarding an extension of these benefits at the end of the year. Further, a change in the political guard could also be detrimental to the projects and their futures.
According to Bloomberg Intelligence analysts Cheryl Wilson and Rob Barnett, renewable energy could be boosted under the Democrats. The analysts are of the opinion that Donald Trump “lacks energy-specific proposals,” adding that he may side with those Republicans who are against credit extensions to clean energy sources.
There’s been some good news in terms of cost reductions in offshore wind. Let’s look at that in the next article.