Renewable Energy Production Incentive (REPI)

A federal production payment of 1.5¢ per kWh that is made available to new qualifying renewable energy generation facilities. However, since the REPI involves spending of federal funds, money must be appropriated annually by Congress. The Energy Policy Act of 2005 reauthorized appropriations for fiscal years 2006 through 2026 and has expanded the list of eligible technologies and facilities owners. See 42 USCS § 13317 for the new REPI statute.

Production Tax Credit (PTC)

Provides the owner of a qualifying facility with an annual tax credit based on the amount of electricity that is generated. By focusing on the energy produced instead of capital invested, this type of tax incentive encourages projects that perform adequately. In 2007, the rate for the PTC is 1.9¢/kWh. The PTC increases from year to year based on the consumer price index.

Passive Tax Appetite

Income from certain types of investments qualifies as passive income. Tax paid on this income is considered passive tax. To take advantage of the Federal Production Tax Credit (the PTC) and Modified Accelerated Cost Recovery System (MACRS), you or a project partner must be paying taxes that fit into this category of tax liability. For more information about what qualifies as passive activity see IRS Publication 925: Passive Activity and At-Risk Rules:

Passive Income

Certain types of income, as defined by the IRS, such as rental income or income from businesses, in which the earner serves only as an investor and is not actively engaged in running the investment as defined by the IRS. See Passive Tax Appetite.


Subscribe to Incentives