We recently wrote about how the spending bill signed in December favors solar power with better and longer renewable energy tax credits than it gives to wind power. However, solar also did better in the extenders” bill than the one technology responsible for generating the most energy from renewables in the US today: biomass.
The tax extenders package benefits biomass power with an extension of the Section 45 production tax credit (PTC). The PTC for technologies other than solar or wind has been extended for two years, through Dec. 31, 2016. The incentive amount for wind, geothermal, and “closed-loop” biomass — the kind that does not create carbon dioxide — is $0.023 per kilowatt hour. For other eligible technologies such as fuel biomass, municipal solid waste, landfill gas and others, the credit is $0.012 per kw/h.
In contrast, the legislation allows solar power companies to keep claiming federal tax credits at 30% of the price of a solar array. The credits, which apply to home solar kits as well as big commercial installations, will be good through 2019. After that, though, the credit will begin to drop, declining to 10% in 2022. Credits through 2022 vs. $0.012 cents per kw/h for one year? Even wind did better than biomass with its $0.023 cents per kw/h and an extension of those credits through 2019.
What is Biomass?
Biomass is biological material derived from living, or recently living organisms. In the context of biomass for electrical power generation, this is often used to mean plant-based material, but biomass can equally apply to both animal- and vegetable-derived material. Woodburning stoves are a primitive form of biomass heating. Ethanol for cars also falls under the biomass category as “biofuel” but it’s not used for electrical power generation.