The Consolidated Appropriations Act, 2021, signed into law on December 27, includes the Energy Act of 2020 (Energy Act) and the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Taxpayer Act), which contains tax provisions important to the energy sector.
The Energy Act, which is divided into 11 titles, establishes and funds programs that promote energy efficiency, carbon reduction, and grid modernization; supports research and development of new energy technologies, renewable energy, and electric vehicles; funds research and development for carbon capture, utilization, and sequestration; and includes initiatives that promote nuclear energy, reductions in industrial emissions, and other innovations through the US Department of Energy (DOE).
The Taxpayer Act extends the sunset or phasedown periods of federal tax credits related to the development and operation of certain renewable energy electric generating facilities, and provides new tax credit extension rules specifically applying to offshore wind power electric generating facilities. The Act also provides eligibility extensions for tax benefits applying to other “green” technologies, including the carbon capture and sequestration tax credit.
For more details concerning the implications of the Energy Act and Taxpayer Act, read the full LawFlash.