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Renewable Electricity Production Tax Credit (PTC)

Date Last Updated1/8/2013
Incentive TypeTax
State/FederalU.S./Federal
Incentive Administrator/Contact OfficeU.S. Internal Revenue Service
Incentive Initiation Date1/3/1992
Incentive Expiration Date12/31/2013
Incentive Size and Funding SourceThe federal renewable electricity production tax credit (PTC) is a per-kilowatt-hour tax credit for electricity generated by qualified energy resources and sold by the taxpayer to an unrelated person during the taxable year.
  • Closed-Loop Biomass: $0.022/kWh.
  • Open-Loop Biomass: $0.011/kWh.
  • Landfill Gas: $0.011/kWh.
  • Municipal Solid Waste: $0.011/kWh.
  • Wind: $0.022/kWh.
  • Geothermal Energy: $0.022/kWh.
  • Qualified Hydroelectric: $0.011/kWh.
  • Marine and Hydrokinetic (150 kW or larger): $0.011/kWh.
The duration of the credit is generally 10 years after the date the facility is placed in service, but there are two exceptions:
  • Open-loop biomass, geothermal, small irrigation hydro, landfill gas and municipal solid waste combustion facilities placed into service after October 22, 2004 and before enactment of the Energy Policy Act of 2005 on August 8, 2005, are only eligible for the credit for a 5-year period.
  • Open-loop biomass facilities placed in service before October 22, 2004, are eligible for a 5-year period beginning January 1, 2005.
Closed-Loop Biomass, Open-Loop Biomass, Landfill Gas, Marine and Hydrokinetic, Geothermal Energy, Qualified Hydroelectric and Municipal Solid Waste Systems all have a begin construction deadline of December 31, 2013. Wind Systems have a begin construction deadline of December 31, 2013. In addition, the tax credit is reduced for projects that receive other federal tax credits, grants, tax-exempt financing or subsidized energy financing.
Eligible RecipientOwners of qualified energy facilities that generated and sold electricity to an unrelated person during the taxable year.
Eligible FuelBiogas; Woody Biomass; Landfill Gas; Municipal Solid Waste
Eligible Project Size (MW)Agricultural Livestock Waste System: >0.15 MW
Minimum Efficiency Required (%)Does Not Specify
Application Form(s)Renewable Energy Tax Form (PDF) (2 pp, 85.2K)
Other Incentive DetailsThe American Recovery and Reinvestment Act of 2009 allows taxpayers eligible for the federal renewable electricity production tax credit (PTC) to take the federal business energy investment tax credit (ITC) or to receive a grant from the U.S. Treasury Department instead of taking the PTC for new installations. The grant is only available to systems where construction began prior to December 31, 2013.
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