Energy Credit – I.R.C. § 48
Sometimes referred to as the Renewable Energy Investment Tax Credit ("ITC"), this credit equals 30 percent of the cost of qualifying small wind, solar, and fuel cell property placed in service, and 10 percent of the cost of other energy property, such as geothermal heat pumps, stationary microturbines, and combined heat and power systems. The depreciable tax basis of the qualifying property is reduced by 50 percent of the amount of the credit. Facilities eligible for the PTC (see above) may elect the 30% ITC in lieu of claiming the PTC under § 45. This credit applies for electing facilities other than wind, and for qualifying small wind energy, fuel cell, geothermal heat pump, combined heat and power systems, and microturbine property where construction starts before January 1, 2017. For qualifying wind facilities, the ITC (and the election to claim it in lieu of the PTC) are available through 2019, though the credit phases down by 20% in 2017, 40% in 2018, and 60% in 2019. For qualifying solar property, the credit remains 30% through 2019, then drops to 26% for projects that begin construction in 2020 and 22% for projects beginning in 2021. The ITC for solar property is scheduled to drop to 10% for projects that begin construction after 2021 (and for projects that begin before 2022 but are not placed in service before 2024).
File Download: Federal Tax Incentives: Renewable Energy