House Members Call on IRS and Treasury to Clarify Renewable Energy Tax Credit

WASHINGTON, D.C.—Today, 30 members of the House Sustainable Energy and Environment Coalition (SEEC) sent a letter to the Internal Revenue Service (IRS) and Department of the Treasury encouraging them to act swiftly in issuing guidance to clarify the eligibility qualifications for the renewable energy tax credit that was extended in the American Taxpayer Relief Act.

Lawmakers extended the renewable energy production tax credit (PTC) as part of the “fiscal cliff” deal signed into law on January 2, 2013.  This extension altered the language of the PTC to apply to projects that have “commenced construction” instead of projects that have been “placed-in-service.”

SEEC members actively support this critical change that will allow more projects to take advantage of the credit.  This language will facilitate increased electricity from robust clean energy sources like wind, geothermal, biomass, and hydropower.  Wind energy alone sustains nearly 75,000 good paying, American jobs and according to the Energy Information Administration, accounted for 44 percent of all new electrical generating capacity in 2012.  The PTC is helping the American wind energy industry grow with nearly 500 wind manufacturing facilities in 44 states across our nation while helping to reduce the cost of wind power by 90 percent since 1980.  However, until the IRS and Treasury provide new guidance, it remains unclear to investors and the renewable industry what construction threshold must be met by an individual project in order to claim the incentive.

"The PTC has successfully ignited America's innovative clean energy industry," said SEEC Co-Chair Rep. Gerry Connolly (D-VA). "I supported the bipartisan fiscal cliff compromise to protect well-paying American jobs, and urge Treasury and IRS to issue guidance swiftly so this critical incentive can continue to bolster our Nation's growing renewable energy sector."

“The renewable energy production tax credit is critical for American energy jobs, and I am pleased Congress extended it last month. We need to support the many alternative energy producers across the county to keep those jobs here in the United States.  I join SEEC members in urging the IRS and Treasury to act swiftly on the guidance for this credit. As companies move forward with planning projects, they need to know what type of credits they will receive,” said SEEC Co-Chair Rep. Steve Israel (D-NY).

Said SEEC Vice-Chair Rep. Chellie Pingree (D-ME): “America is becoming a leader in clean energy, creating good paying jobs right here at home and helping end our dependence on oil at the same time. But the companies behind these projects need to know exactly when they become eligible for the Production Tax Credit, so they can move forward with the job-creating projects.”

SEEC Vice-Chair Rep. Doris Matsui (D-CA) said: “I am pleased that the PTC has been extended for a year.  Investing in clean energy technology will help create good jobs, strengthen our economy, and address both our national security and environmental needs.  It is my hope that we can quickly get clarification on eligibility requirements so that American clean tech companies can have the certainty they need moving forward.” 

"The PTC is important to the wind turbine manufacturers, but also to all the small businesses along the supply chain and the farmers and land owners who want turbines on their property.  Clarifying the rules to ensure the PTC applies to those projects that are "commenced construction" in 2013 will provide the certainty for these businesses to invest in the future and maintain and create thousands of good-paying private sector jobs in Colorado and throughout the country," said SEEC Member Rep. Ed Perlmutter (D-CO).

SEEC Member Rep. Earl Blumenauer (D-OR) said: “The extension of the renewable energy tax credit is a victory for all of us who want to continue to move America away from its dangerous dependence on foreign fossil fuels and toward a more sustainable path.  Clarifying the regulatory environment allows investors, purchasers, and manufacturers to move forward in a confident way that will provide clean energy jobs for thousands of Americans.”  

"As a proud new member of SEEC, today I joined my colleagues in urging the Administration to provide clarity on the recently extended wind Production Tax Credits. These are critical in helping the wind energy industry compete with fossil fuels, leading to faster innovation, development, and job creation. But the industry needs certainty, and it needs it fast, so it can make investments for the future. We must keep America at the cutting edge of wind technology,” said SEEC Member Rep. Judy Chu (D-CA).

SEEC Member Rep. Niki Tsongas (D-MA) said,“Jobs in the clean energy sector in Massachusetts grew by 11% in 2011 alone.  Wind power plays a big role in creating these American jobs while at the same time reducing our dependence on fossil fuels.  By providing project developers with the clarification they need, we will see more robust projects moving forward sooner, creating good paying jobs in this rapidly growing sector of our economy.”

The full text of the letter is below:

February 1, 2013

The Honorable Neal Wolin                                         The Honorable Steven Miller
Acting Secretary and Deputy Secretary                     Acting Commissioner
U.S Department of the Treasury                                 Internal Revenue Service
1500 Pennsylvania Avenue, N.W.                              1111 Constitution Avenue, N.W.
Washington, D.C. 20220                                            Washington, D.C. 20004

Dear Acting Secretary Wolin and Acting Commissioner Miller,

The members of the House Sustainable Energy and Environment Coalition (SEEC) encourage you to act swiftly in issuing guidance to clarify the eligibility qualifications for the renewable energy tax credit that was extended in the American Taxpayer Relief Act (P.L. 112-240).   Specifically, we are referring to 26 USC § 45(d), the commencement of construction for wind facilities eligible to claim the electricity production credit, the construction of which begins before January 1, 2014.

As you know, the American Taxpayer Relief Act of 2012 (PL 112-240) changed section § 45(d), commonly referred to as the production tax credit (PTC), to apply to projects that have “commenced construction”  instead of projects that have been “placed-in-service.”  We are supportive of this critical change and encourage the guidance to ensure inclusion of all projects begun in 2013.  We believe this will facilitate increased electricity generation from clean energy sources like wind, geothermal, biomass, and hydropower.  However, until the Internal Revenue Service (IRS) provides new guidance, it remains unclear to investors and the renewable industry what construction threshold must be met by an individual project in order to claim the incentive.

The wind energy industry sustains nearly 75,000 good-paying, American jobs and, according to the Energy Information Administration, accounted for 44 percent of all new electrical generating capacity in 2012.  As supporters of clean energy development and production, we believe it is critical to develop and maintain policies that move our country toward a clean energy future.  Because the PTC has been extended for one year only, it is imperative that you work to clarify the specific criteria that will define the commencement of construction as soon as possible.

Thank you for your consideration and attention to our request.  We greatly appreciate your efforts to address this important issue in a timely manner.

Sincerely,

Members of the House Sustainable Energy and Environment Coalition

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