Senate Democrats on Wednesday night released the draft text of the Inflation Reduction Act of 2022 (the Act). The Act includes a number of provisions related to renewable energy tax incentives.
The Act would reinstate the full investment tax credit (ITC) rate of 30% and the production tax credit (PTC) rate of 1.5 cents per kWh (subject to inflationary adjustments) for projects on which construction begins before January 1, 2025.
Additionally, the Act would adopt new provisions that would, in effect, extend the ITC and PTC at their full credit rates for projects placed in service in 2025 or later and on which construction begins before 2033. Projects would only be eligible for these credits if the greenhouse gas emissions rate for such projects is not greater than zero.
Following are several notable features of the Act:
Extends the ITC for investments in certain types of renewable energy facilities, including solar, fiber-optic, thermal energy projects, and other renewable energy facilities (including otherwise PTC-eligible facilities for which an ITC election is made), as long as construction of such facilities begins before 2025. The Act also would adopt a stand-alone ITC for storage facilities the construction of which begins before 2025, and would extend the ITC for certain costs associated with the construction of interconnection equipment installed in connection with other ITC-eligible facilities.
Renews the full 30% credit rate for ITC-eligible facilities that...
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