Renewables attract utility investment dollars.
One year ago, Fortnightly’s May 2008 Frontlines column criticized structural barriers preventing utilities from leading the green energy revolution: “Since the 1980s, many utility companies have viewed renewable energy as [a] bitter pill shoved down their throats by do-gooder politicians… While power purchase agreements can transfer some benefits as a function of prices, the production tax credit’s structure has sent utilities a clear message: They shouldn’t profit from the green energy revolution.”
Since then, a wave of policy changes has washed over those barriers and reduced them to rubble.
First, the Internal Revenue Service in July 2008 revised the rule that barred utilities from claiming the production tax credit (PTC) (see IRS Notice 2008-60). As a result, load-serving entities that sell power generated by their own renewable plants now can qualify for the PTC. Second, the Emergency Economic Stabilization Act, the bill that funded the Troubled Asset Relief Program (TARP), expanded both the PTC and renewable investment tax credits (ITC) to include load-serving utilities, and extended the ITC for solar-power investments for eight years, through the end of 2016.