Both the United States House and Senate agreed to grant extensions to the 30 percent investment tax credit (ITC) for the production of solar energy and the 2.3-cent-per-kilowatt-hour production tax credit (PTC) for the production of wind power.
The extensions will fuel the growth of both wind and solar, as the industries gain tax credits through 2020.
The credits were originally scheduled to expire for any projects beginning construction after December 31, 2014.The credits have now been extended to construction starting before January 1, 2020, with gradual phase-outs.
A Big Boost for Berkshire
With its huge commitment to wind power in Iowa, Nebraska and Texas, Berkshire Hathaway is reportedly the largest user of these energy investment tax credits.
In October, Berkshire Hathaway Energy borrowed $275 Million for its Jumbo Road wind farm in Texas, and Berkshire Hathaway’s MidAmerican Energy Company is currently building the tallest land-based wind turbine ever built in the United States at its wind farm in Adams County, Iowa.
Meeting Lower Carbon Goals
In August 2015, President Obama and the EPA announced the Clean Power Plan, which set aggressive goals for reducing carbon pollution from power plants. When the Clean Power Plan is fully in place in 2030, carbon pollution from the power sector will be 32 percent below 2005 levels.
Expanded use of wind and solar power generation will enable the retirement of antiquated coal-burning and oil-burning plants, which will not only reduce carbon dioxide (CO2) emissions linked to climate change, but will also reduce emissions of sulfur dioxide and other pollutants that cause an assortment of health ailments.
© 2015 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.