Last night, Congressional leaders announced an agreement on a $900 billion COVID relief bill. While the text of the bill has not been released as of this writing, people familiar with the negotiations have indicated that the deal will extend renewable energy tax credits for wind and solar projects and the Section 45Q carbon capture tax credit, with special provisions addressing offshore wind farms.
According to these sources, the bill would extend the 26% investment tax credit available for solar projects that begin construction in 2020 by two years – to the end of 2022. A 22% credit would then be available for projects that begin construction in 2023, with the credit phased out afterwards. In the case of the production tax credit, eligibility at the 60% level would be extended for one year for projects that begin construction before the end of 2021.
Additionally, according to these sources, the bill would allow offshore wind farms to elect either the production tax credit and the investment tax credit, with the investment tax credit extended by five years, allowing a full 30% investment tax credit for offshore wind farms that begin construction by the end of 2025.
For carbon capture projects, which currently must begin construction by the end of 2023, the bill would allow credits for projects that begin construction by the end of 2025.
The bill would also extend excise tax credits for alternative fuels and income tax credit for biofuels, as well as production tax credits for coal mined on tribal lands. The bill would additionally extend a credit for installation of electric vehicle chargers and other alternative fuel vehicle refueling property through 2021. However, the bill would not extend the $7,500 consumer tax credit for the purchase of electric vehicles, which phases down once a manufacturer sells 200,000 electric vehicles.
Visit us at mayerbrown.com
Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
© Copyright 2020. The Mayer Brown Practices. All rights reserved.
This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.
