Federal Renewable Energy Tax Credit – FAQs

1. How Long Have Federal Renewable Energy Investment Tax Credits Been Around

Investment Tax Credits (ITCs) were created by Congress in 1962.  Legislation was passed in 1990 as part of the Revenue Reconciliation Act, which expanded the ITC into its current form to include the rehabilitation credit and the energy credit (originally 10% and increased to 30% in 2005), as outlined in IRC Sections 38 and 48.  The Protecting Americans from Tax Hikes (PATH) Act of 2015 further extended the availability of the 30% ITC from 2016, to include solar projects that are under construction by December 2019, with a gradual phase down of the rate to a permanent 10% ITC level in 2022.

2. How Many Renewable Energy Tax Credits Can I Obtain From The Development Of My Solar Project?

Currently, costs incurred in developing solar energy properties generate credits equal to 30% of qualified energy property expenditures or their fair market value when placed into service.  There will be a gradual phase down of the rate to a permanent 10% ITC level in 2022 for projects that begin construction after December 2019.

3. Is There Recapture?

There is a five year recapture period with recapture being ratably reduced each year during the period.  Actual historical recapture of energy ITCs is negligible.

4. Can Excess Energy ITCs Be Carried Forward Or Back?

Yes.  Excess energy ITCs can be carried forward for twenty years or back for one year.

5. Where can I learn more?

For more information, contact Lacie Clark or Jonathan Gross.

FEDERAL RENEWABLE ENERGY

These credits are typically derived from renewable energy projects which also generate opportunities for favorable public relations.

FEDERAL HISTORIC REHABILITATION

The Federal Historic Rehabilitation Tax Credit is an incentive available for the rehabilitation of certified historic structures.  The program provides a tax credit equal to 20% of eligible rehabilitation expenditures.

FEDERAL AFFORDABLE HOUSING

The federal credit can be monetized by developers, often through syndicators, and utilized by third investors through the use of partnerships or limited liability companies.

FEATURED PROJECTS