The “Family and Business Tax Cut Certainty Act of 2012” – the so-called tax extenders – was reported by the Senate Finance Committee on August 2, 2012, and included in the American Taxpayer Relief Act of 2012 (“ATRA”) signed into law in January 2013.  Among other things, the legislation extended and modified the placed in service date for the Section 45 renewable electricity Production Tax Credit (“PTC”) and the Section 48 Investment Tax Credit (“ITC”) in lieu of the PTC.  ATRA extended the wind credits (PTC and ITC in lieu of PTC) for one year through December 31, 2013, and the traditional “placed in service” requirement for all Section 45 renewable energy facilities was replaced by a rule that allows all facilities that begin construction before January 1, 2014, to qualify for the PTC (or ITC in lieu of the PTC). 

 

As the committee report correctly notes, replacing the placed in service requirement with a commence construction standard will add greater policy certainty and enhance the effectiveness of clean energy tax incentives. The language passed by Congress, however, did not encompass solar energy property in this policy change.  The commence construction modification provided for in the Senate Finance Committee tax extenders package should apply to all Section 45 and 48 clean energy incentives, regardless of technology.  This revision will provide consistent tax policy treatment across clean energy technologies and, in the case of solar, drive the installation of an additional 4,000 megawatts (MW) of capacity.