Energy tax extenders package passed

by Eversheds Sutherland (US) LLP

Eversheds Sutherland (US) LLP

The Bipartisan Budget Act of 2018 (2018 BBA) passed by Congress and signed into law on February 9, 2018, extends and changes tax credits for the renewable energy, alternative fuels and nuclear energy industries, and also makes other changes relevant to the energy sector. The energy-related tax provisions in the 2018 BBA closely track those proposed in late December by the Tax Extender Act of 2017 (Extenders Bill), but vary in material respects.1 The 2018 BBA provisions include:

  • Extensions of the production tax credit (PTC) and investment tax credit (ITC) for technologies not previously extended. 
  • Extensions of the biodiesel and alternative fuel tax credits.
  • Extensions and favorable changes to the nuclear PTC, consistent with changes proposed by the House of Representatives in its November 2, 2017, version of the bill then known as the Tax Cuts and Jobs Act.
  • Extensions of many of the other energy tax credits and extensions of certain energy taxes and other provisions.

This alert summarizes the principal provisions of the 2018 BBA that address energy tax provisions of the Internal Revenue Code.

Eversheds Sutherland Observation: The House version of the recently passed tax reform legislation (P.L. 115-97), formerly known as the Tax Cuts and Jobs Act, included provisions that, if enacted, would have:

  • Eliminated the inflation adjustment amount for PTC for projects the construction of which began after the enactment of that legislation. As a result, those projects would have been entitled to a 1.5 cent per kWh credit as opposed to a 2.4 cent (with continuing adjustments for inflation) per kWh credit.
  • Potentially changed the beginning of construction rules. The House Plan stated that to be treated as having begun construction, there must be “a continuous program of construction” from the date on which construction begins until the project is placed in service. The addition of that language suggested that the begun construction requirement can be satisfied only through the actual physical work test and not through the 5% safe harbor.
The 2018 BBA does not include either of these provisions and we believe that it is highly unlikely that future legislation will include these proposed changes.


The 2018 BBA was passed as part of a major budget deal that ended a brief government shutdown. The 2018 BBA includes many of the same provisions as the Extenders Bill; however, some of the provisions proposed to be extended through the end of 2018 in the Extenders Bill were extended only retroactively through the end of 2017.

Production Tax Credit (PTC)

Under the 2018 BBA, the PTC under Section 45 (and ITC in lieu of PTC for facilities described in Section 45) is available, retroactive to January 1, 2017, for the following facilities if construction began by December 31, 2017:

  • Closed-loop biomass facilities,
  • Open-loop biomass facilities,
  • Geothermal energy facilities,
  • Landfill gas facilities,
  • Trash facilities, 
  • Qualified hydropower facilities, and
  • Marine and hydrokinetic renewable energy facilities.

The 2018 BBA did not impact the PTC for wind project since the PTC for wind was previously extended by the Protecting Americans from Tax Hikes Act of 2015 (the PATH Act), which provided as follows for wind projects:

If construction begins: The otherwise
available PTC or ITC
is reduced by:
Before 2017 0%
In 2017 20%
In 2018 40%
In 2019 60%
In 2020 or later 100%


Investment Tax Credit (ITC)

The 2018 BBA extends the ITC under Section 48, retroactive to January 1, 2017, for certain types of facilities described in Section 48 that were not extended by the PATH Act, as described below:

  • Qualified fuel cell, fiber-optic solar and small wind facilities are entitled to the ITC as follows:

If construction

And the project
is placed in
service by:
The applicable
ITC percentage
Before 2020 The end of 2023 30%
In 2020 The end of 2023 26%
In 2021 The end of 2023 22%


If construction of these facilities begins after 2021 or the project is not placed in service by the end of 2023, no ITC would be available.

  • Qualified microturbine, combined heat and power, and geothermal heat pump facilities are entitled to a 10% ITC if construction begins before 2022.
  • Unlike the Extenders Bill, the ITC specific provisions in the 2018 BBA do not include any changes or extensions for geothermal electric facilities although, as noted above, geothermal electric facilities were extended under Section 45.

The PATH Act previously extended the Section 48 ITC for solar projects to provide as follows:

If construction
And the project
is placed in
service by:
The applicable
ITC percentage
Before 2020 The end of 2023 30%
In 2020 The end of 2023 26%
In 2021 The end of 2023 22%
In any year In or after 2023 10%

Biodiesel, Alternative Fuels and Second Generation Biofuels

The 2018 BBA extends the Section 40A biodiesel and renewable diesel credits as well as the Section 6426 and Section 6427 biodiesel and alternative fuels credits (other than the Section 6427 credit for alternative fuel mixtures) for fuel sold or used by December 31, 2017, applicable retroactively to fuel sold or used in 2017.

Eversheds Sutherland Observation: Consistent with prior retroactive extensions of these credits, the Secretary of Treasury is directed to issue guidance, within 30 days after enactment, for making 2017 claims, which, we expect, will be substantially similar to guidance provided for prior retroactive extensions.

The 2018 BBA also extends the Section 40 second generation biofuel producer credit to biofuel produced through December 31, 2017, applicable retroactively to production in 2017.

Nuclear PTC

The 2018 BBA also modifies the PTC for advanced nuclear power facilities. The 2018 BBA provides for the allocation of unutilized national megawatt capacity limitation amounts. Under the new provision, the Secretary must allocate any unutilized capacity limitation as rapidly as practicable beginning in 2021, first to facilities already placed in service that did not receive their full nameplate capacity, and then to facilities placed in service beginning in 2021 in the order they are placed in service. A national megawatt limitation amount is considered unutilized if the facility to which it was allocated has not been placed in service by the end of 2020.

The 2018 BBA also permits qualified public entities, defined as government entities, mutual or cooperative electric companies, and not-for-profit electric utilities, to elect to transfer the nuclear PTC and have an eligible project partner be treated as the taxpayer for purposes of the nuclear PTC. An “eligible project partner” is defined broadly, and includes any person: (1) responsible for or participating in the design or construction of the facility; (2) participating in the provision of nuclear steam supply to the facility; (3) participating in the provision of nuclear fuel to the facility; (4) that is a financial institution providing financing to the facility; or (5) having ownership in the facility. If the credit is claimed by a partnership, a partner that is a qualified public entity will be treated as the taxpayer for its distributive share and an “eligible project partner” will include any other partner of the partnership. For any credits transferred to an eligible project partner, the eligible project partner must take the credits in the taxable year ending with or after the taxable year of the transferring qualified public entity.

Eversheds Sutherland Observation: The implementation of these changes will require Treasury guidance regarding the process and procedures for the allocation of unutilized capacity limitation and regarding the credit transferability provisions in the 2018 BBA.


Residential Energy Efficient Property

The 2018 BBA extends the credit for residential energy efficient property for all property covered by Section 25D (qualified solar electric, solar water heating, fuel cell, small wind energy, and geothermal heat pump property) through December 31, 2021, with a phase-out of the credit amount. The phase-out applies to all Section 25D property and allows for a credit of 30% of property placed in service through 2019 (retroactive to property placed in service in 2017), 26% of property placed in service in 2020, and 22% of the property placed in service in 2021.

Other Energy Credit Related Changes

  • Extension of the Section 4611 oil spill liability trust fund financing rate for the period March 1, 2018, through December 31, 2018. 
  • Extension of the Section 25C nonbusiness energy property credit to property placed in service by December 31, 2017. The extension is retroactive to property placed in service in 2017.
  • Extension of the Section 30B credit for fuel cell motor vehicles to property purchased by December 31, 2017. The extension is retroactive to property purchased in 2017.
  • Extension of the Section 30C alternative fuel vehicle refueling property credit to property placed in service by December 31, 2017, applicable retroactively to property placed in service in 2017.
  • Extension of the Section 30D credit for two-wheeled plug-in electric vehicles through 2018, applicable retroactively to vehicles acquired in 2017.
  • Extension of the Section 45(e)(10) credit for Indian coal production facilities for coal produced by December 31, 2017, retroactive to production in 2017. 
  • Extension of the Section 45L credit for energy-efficient new homes acquired by December 31, 2017, applicable retroactively to homes acquired in 2017.
  • Changes to calculation of the Section 45Q carbon dioxide sequestration credit. 
  • Extension of the Section 168(l) special allowance for second generation biofuel plant property through 2017, applicable retroactively to property placed in service in 2017.
  • Extension of the Section 179D energy efficient commercial buildings deduction through 2017, applicable retroactively to property placed in service in 2017.
  • Extension of the Section 451(k) special rule for sales or dispositions to implement FERC or state electric restructuring policy for qualified electric utilities through 2017, applicable retroactively to dispositions in 2017.
Eversheds Sutherland Observation: The 2018 BBA provides only a one-year retroactive extension of certain tax credits. Consequently, with respect to those provisions, they are again expired for 2018 and we do not anticipate that they will be extended for 2018 until, at the earliest, late in 2018. The timing of the passage of the 2018 BBA, however, allows taxpayers to claim any income tax benefits on originally filed tax returns, whereas had the passage of these extenders for 2017 been delayed, many taxpayers instead would have been required to file amended tax returns to obtain these benefits.


1 View our previous Legal Alert on the Extenders Bill.

[View source.]

Written by:

Eversheds Sutherland (US) LLP

Eversheds Sutherland (US) LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at:

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit
  • New Relic - For more information on New Relic cookies, please visit
  • Google Analytics - For more information on Google Analytics cookies, visit To opt-out of being tracked by Google Analytics across all websites visit This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at:

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.