In a notice released on April 3, 2013, the IRS increased the 2013 amount of the Section 45(a) production tax credit (PTC) for the sale of electricity produced from the qualified energy resources of wind, closed-loop biomass, geothermal energy, and solar energy to 2.3 cents per kilowatt-hour. This is an increase over the 2.2 cents that applied last year. Slight increases were also provided for the Section 45 tax credits associated with refined coal production and coal produced on American Indian lands.
Due to the minimal adjustment for the energy resources referred to above, the PTC amount for the remaining energy resources covered under Section 45 (e.g., open-loop biomass, waste-to-energy, qualified hydropower) remains at 1.1 cents per kilowatt-hour.
These adjustments do not indicate a change in governmental policy or increased support for renewable energy. Rather, it reflects the IRS’s obligation to periodically adjust the value of the PTC for inflation.
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