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House Democrats Warn Tax Credit Ambiguity Sidelines Renewables Investment

Feb 4, 2013
Source: 
(The Hill)

A House Democratic caucus called on tax writers Friday to quickly interpret language in a recently passed renewable energy tax credit.

At issue is a change in the production tax credit, which was extended for one year in January. Renewable energy projects, such as wind, biomass and geothermal, can now collect the incentive if the development begins construction this year. Previously, those projects needed to produce power by the end of the year.

But the ambiguity of what constitutes “commenced construction” has kept developers waiting, 30 members of the Sustainable Energy and Environment Coalition wrote to the IRS and Treasury Department.

Differing interpretations exist as to what qualifies as “commenced construction.” Some experts say developers need only invest 5 percent of the total project cost, while others contend physical construction must be underway.