The IRS has published its annual inflation adjustment for production tax credits. The adjustment results in the production tax credit increasing from 2.2 cents per kilowatt hour to 2.3 cents per kilowatt hour for wind, closed-loop biomass and geothermal. This is good news for developers as each hour of electricity generated by their qualified projects is slightly more valuable for tax credit purposes.
The production tax credit in 2013 is 1.1 cents per kilowatt hour for open-loop biomass, small irrigation, landfill gas, trash combustion, qualified hydropower and marine and hydrokinetic energy facilities.
Further, the phaseout that in theory applies to production tax credits when energy prices are raised to a level where the production tax credit is thought to be unnecessary, will not be triggered in calendar year 2013. No one in the industry worries too much about the phaseout, but it is good to know that it will not be a problem in 2013.
The tax credit for refined coals sold in 2013 is $6.59 per ton sold in 2013. Finally, the tax credit for Indian coal is $2.308 per ton sold in 2013.
More details are available from CCH here.