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Last night, leaders of Congress announced an agreement on a $ 900 billion COVID relief bill. Although the text of the bill has not yet been published as of this writing, people familiar with the negotiations have indicated that the agreement will extend the renewable energy tax credits for wind and solar projects and the section 45Q carbon sequestration tax credit, with special Regulations for offshore wind farms apply.
According to these sources, the bill would extend the 26% investment tax credit available for solar projects starting construction in 2020 by two years until the end of 2022. A 22% credit would then be available for projects starting construction in 2023. with the credit expire after that. In the case of the Production Tax Credit, the 60% eligibility would be extended by one year for projects starting construction before the end of 2021.
According to these sources, the bill would allow offshore wind farms to choose between the production tax credit and the investment tax credit, with the investment tax credit extended by five years, allowing for a full 30% tax credit for offshore wind farms to start construction by the end of 2025.
For carbon capture projects that currently have to start construction by the end of 2023, the draft law provides for credits for projects that are expected to start construction by the end of 2025.
The bill would also extend excise tax credits for alternative fuels and income tax credits for biofuels, as well as production tax credits for coal mined in tribal areas. The bill would also extend credit for installing electric vehicle chargers and other refueling items for alternative fuel vehicles through 2021. However, the bill would not extend the $ 7,500 electric vehicle purchase tax credit that expires after a manufacturer sold 200,000 electric vehicles.
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