The IRS today reduced the threshold by which renewable energy projects can receive tax credits. Via the Wall Street Journal, renewable energy projects can qualify for tax credits if they have incurred 3% of the project cost before the beginning of 2014 — down from the previous threshold of 5%. The tax credit program expired at the end of 2013, but projects that began installation in that year are still eligible.
The IRS also clarified what kind of construction activity qualifies a project for tax credits. The IRS said examples include wind projects in which foundations have been dug for wind towers, anchor bolts have been installed and concrete pads have been poured.
The IRS’ guidance will help reduce the uncertainty that has held up a number of wind power projects in need of outside investment capital, the Wall Street Journal notes. Sources say the lowered threshold could also help other types of renewable energy projects, such as geothermal and biomass, get off the ground.
