The Internal Revenue Service recently published its
providing the inflation adjustment factors and reference prices used in
determining the amount of production tax credits (PTCs) for renewable
energy and refined coal production under Section 45 of the Internal Revenue
Code of 1986, as amended.
The 2019 inflation adjustment factor and reference prices apply to calendar
year 2019 sales of kilowatt hours of electricity produced in the United
States (or a possession thereof) from qualified energy sources.
Pursuant to the calculation required by Section 45(b)(2), the 1.5 cents
statutory amount in Section 45(a)(1) is adjusted annually for inflation, by
multiplying such amount by the inflation adjustment factor for the calendar
year in which the sale occurs. The inflation adjustment factor for calendar
year 2019 for qualified energy resources is 1.6396. That means the
inflation-adjusted amounts of PTCs available for sales of electricity
increased from 2.4 cents per kWh for 2018, to 2.5 cents per kWh for 2019.
McGuireWoods lawyers are experienced in energy, project finance and tax
equity structures. Do not hesitate to reach out if your business would like
to discuss any of the above information.