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IRS: Renewable Energy Tax Incentives & Financial Assistance

Renewable Energy Tax Incentives

The Consolidated Appropriations Act of 2016 (P.L. 114-113) provided multi-year, phase-down extensions of both the Investment Tax Credit (ITC) and Production Tax Credit (PTC). It also extended bonus first-year depreciation for qualified energy properties to include property acquired before Jan. 1, 2020. The Administration's 2017 budget proposal calls for permanently extending these renewable energy incentives.


-- The Production Tax Credit (PTC) reduces the federal income taxes of renewable energy projects based on the electrical output (measured in kilowatt-hours, or kWh) of grid-connected renewable energy facilities.

-- The Investment Tax Credit (ITC) reduces federal income taxes based on capital investment in renewable energy projects (measured in dollars). The ITC is earned when the equipment is placed into service. For information on these incentives, click on the buttons below.  For assistance in selling credits, Contact Us.



IRS Financial Assistance

Clean Renewable Energy Bonds (CREBs)

Clean renewable energy bonds (CREBs) can be used to finance renewable energy projects using technologies  that also qualify for the federal renewable energy production tax credit (PTC): wind, closed-loop and open-loop biomass, geothermal energy resources, landfill gas, municipal solid waste, qualified hydroelectric, and marine and hydrokinetic energy resources.


CREBs may be issued by electric cooperatives, government entities (states, cities, counties, territories, Indian tribal governments or any political subdivision thereof), and certain lenders.  The bondholder receives federal tax credits in lieu of a portion of the traditional bond interest, resulting in a lower effective interest rate for the borrower. The issuer remains responsible for repaying the principal on the bond.


For further information on CREBs and how to apply, see:




For help navigating the steps that need to be taken to secure the bond funding, Contact Us.


Qualified Energy Conservation Bonds (QECBs)

Qualified Energy Conservation Bonds (QECBs) may be used by state, local and tribal governments to finance certain types of energy projects. QECBs are qualified tax credit bonds, and in this respect are similar to Clean Renewable Energy Bonds or CREBs.


The difference is that borrower who issues the bond pays back only the principal of the bond, and the bondholder receives federal tax credits in lieu of the traditional bond interest. The tax credit may be taken quarterly to offset the tax liability of the bondholder. Also, bondholders will receive only 70% of the full rate set by the Treasury Department under 26 USC § 54A. QECB rates are available here.


Credits exceeding a bondholder's tax liability may be carried forward to the succeeding tax year, but cannot be refunded. Energy conservation bonds differ from traditional tax-exempt bonds in that the tax credits issued through the program are treated as taxable income for the bondholder.


In contrast to CREBs, QECBs are not subject to a U.S. Department of Treasury application and approval process. Bond volume is instead allocated to each state based on the state's percentage of the U.S. population as of July 1, 2008.


For further information on CREBs and how to apply, see:




For help navigating the steps that need to be taken to secure the bond funding, Contact Us.

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Renewable Energy Consulting Services "IRS Renewable Incentives"

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