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Renewable energy tax credits

In a rare move of congressional compromise, achievement, and common-sense legislation, the House Appropriations Committee revealed on December 15 that tax credits for renewable energy investments would be extended for several years. The tax credit extensions affect wind and solar energy and form part of the more than 2,000-page spending bill unveiled by the Committee. On December 18, the bill passed with broad support in both the Senate and the House of Representatives.

The alternative investment tax credit (ITX) for solar, which was set to expire at the end of 2016, was extended through the end of 2019 at its current rate of 30 percent. The credit will then be phased down over a period of two years, dropping to 26 percent in 2020 and then 22 percent in 2021 before permanently settling at 10 percent for 2022 and beyond. Congressional leaders also agreed to phase down the solar residential energy-efficiency property in parallel.

In addition to these ground-level tax extensions, the spending bill also allocates $11 billion for Department of Energy programs, nearly 8 percent more than last year.