New tax credit for transmission projects could stimulate construction
- Oct 28, 2021 1:34 am GMT
A new tax credit proposal from the Biden Administration is aimed at incentivizing a wave of investment into new transmission projects over the next decade.
The new program, proposed under the Sect. 48D of the energy code, would offer a tax credit of up to 30% of the investment into new transmission power line projects that are placed in service between Jan. 1, 2022 and Jan. 1, 2032. The Biden proposal rides the coattails of a bill proposed by legislators in the house and senate earlier this year.
Qualifying projects would include underground, overhead and underwater transmission projects that carry a minimum voltage of 275kV and a minimum transmission capacity of 500MW. Updates to existing infrastructure can also qualify.
The program highlights the urgency around private investment into transmission projects. The U.S. has made long strides in improving its renewable generation over the last decade, however, moving that energy from where it's created to where it's needed has been a significant problem and one that needs to be addressed in order for the country to realize its carbon and climate ambitions.
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