A bill to amend the Internal Revenue Code of 1986 to extend the clean electricity production credit and the clean electricity investment credit based on increases in the price of, and demand for, electricity, and for other purposes.
Sponsored By: Senator Ron Wyden
Introduced
Summary
Market-triggered clean energy tax credits shift when and how several clean energy tax credits apply by tying eligibility to electricity price or demand changes instead of fixed sunset dates. A price or demand increase year is when national average electricity prices to customers rise more than 2 percent year over year or when annual electricity sales to customers exceed the prior year.
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- Homeowners: The energy-efficient home improvement credit and the residential clean energy credit can be renewed after a market trigger, but those renewals do not apply to property placed in service in the first two calendar years after the trigger.
- Developers and investors: Production and investment credits move from fixed sunsets to a market-triggered schedule. The bill sets the credits’ applicable year as the later of six years after a trigger or the year 2032, giving projects a longer planning horizon.
- Leasing arrangements: It removes prior rules that denied credits for wind and solar leases, allowing many leasing deals to qualify for the production and investment credits.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 0 benefits, 1 costs, 1 mixed.
Home energy tax credits delayed
If enacted, the bill would pause parts of two home energy tax credits for two years after a Treasury Secretary trigger finding. A trigger year would be when EIA data show national average electricity prices rose more than 2% from the prior year, or when annual sales (MWh) increased. The Secretary must make determinations by set deadlines, including a 2025 check before January 1, 2027. If the Secretary finds a trigger year, you would not be able to claim the main home improvement tax credit for property put in service during the first two calendar years after that finding. You would also not be able to claim the residential clean energy tax credit for expenditures made during that same two-year window. Homeowners and small business owners should check the date they placed property in service or spent money to see if the exclusion applies.
Clean energy tax credits for investors
If enacted, the bill would change when and who can claim clean electricity production and investment tax credits. It would make a year a trigger year if EIA data show the national average electricity price rose more than 2% from the prior year, or if annual sales (MWh) rose. When triggered, the credit's applicable year would be the later of 2032 or six years after the trigger year. If the Secretary finds a trigger during a phase-out year, the next six years would be treated as a 100% phase-out. The bill would also remove a rule that denied credits for some wind and solar leasing deals and delete a technical qualifier in the investment credit. The leasing repeal would apply to taxable years starting after enactment.
Sponsors & CoSponsors
Sponsor
Ron Wyden
OR • D
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
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