IMPACT Fact Sheet
The IMPACT Act
“Investing to Modernize the Production of American Clean Energy and Technology Act”
The IMPACT Act modernizes and realigns incentives within the energy sector in order to end wasteful subsidies to mature and profitable fossil energy companies while accelerating the deployment of renewable electricity generation and alternative-fueled vehicles and creating jobs. The bill would reduce the federal deficit by more than $11 billion over 10 years.
- Extension of the Production Tax Credit for Electricity Produced from Renewable Sources
The bill provides for an eight year extension of the Production Tax Credit for wind, solar, geothermal, biomass, landfill gas, hydropower, and marine and hydrokinetic power production. This tax credit is currently set to expire at the end of 2012 for wind and at the end of 2013 for other technologies. A termination provision specifies that if a federal Renewable Electricity Standard or similar renewable electricity requirement is passed into law, then the Production Tax Credit will phase out within 12 months. This provision is estimated to cost $20.9 billion over 10 years.
- Incentives for Offshore Wind
The bill would make the first 3,000 megawatts of U.S. offshore wind projects eligible for a 30 percent Investment Tax Credit. This provision is estimated to cost $2.5 billion over 10 years.
- Extension of the 1603 Renewable Energy Grant Program
The bill extends for two years the 1603 Renewable Energy Grant Program that allows new renewable energy projects to claim a one-time Treasury grant of 30 percent of project’s capital costs. Companies could continue to use similarly-valued tax credits instead of the grant, but they could not use both for the same project. This National Renewable Energy Laboratory estimates this expired program that began under the Recovery Act has created more than 75,000 direct jobs. This provision is estimated to cost $2.1 billion over 10 years.
- Incentives for Energy Efficiency
The bill extends two key energy efficiency tax credits that had expired at the end of 2011. The tax credit for energy efficient new homes provides up to a $2,000 credit for new homes that reduce heating and cooling energy consumption by 50 percent relative to established standards. The energy efficient appliance tax credit provides manufacturers of high-efficiency residential clothes washers, refrigerators, and dishwashers with a tax credit ranging from $50 to $250 per unit. Both provisions are extended for one year at an estimated cost of $442 million over 10 years.
- Incentives for Domestic Clean Energy Manufacturing
The bill allocates $5 billion in tax credits under the 48C program for the construction of new and modified facilities for manufacturing clean energy technologies. This Recovery Act program previously awarded $2.3 billion in tax credits to 183 manufacturing facilities across 43 states and created more than 41,000 jobs. The President has also requested $5 billion in 48C tax credits in his Budget Request. This provision would cost approximately $3.6 billion over 10 years.
- Increase the Electric Vehicle Tax Credit
The base amount of the consumer tax credit for purchase of plug-in electric vehicles is increased from $2,500 to $5,000. Including additional credit based on battery size, most electric vehicles would now be eligible for a tax credit totaling $10,000. This was specifically called for recently by President Obama. Additionally, the per manufacturer cap on vehicle sales eligible for the tax credit would be increased from 200,000 vehicles to 400,000. This is estimated to cost $2.9 billion over the next 10 years.
- Incentives for Electric, Natural Gas, and Fuel Cell Vehicle Fuel Pumps
The bill would extend through 2016 and increase the tax credit for residential and commercial fuel pumps serving electric, natural gas, and fuel cell vehicles. Residential fueling pumps would be eligible for a tax credit of up to $2,000 and commercial pumps would be eligible for up to a $50,000 credit. In addition, $750,000,000 in bonds are made available through the bill for tax exempt entities to purchase electric, natural gas, and fuel cell vehicle fuel pumps. These provisions are estimated to cost $479 million over the next 10 years.
- Incentives for Heavy Duty Natural Gas Vehicles
The bill would extend currently expired tax credits for three classes of natural gas trucks weighing 8,500 pounds or more through 2016. The credit would cover between 50 and 80 percent of the incremental cost of a natural gas vehicle (in relation to a comparable gasoline-powered vehicle). The incremental cost is capped between $10,000 and $40,000, depending on vehicle size. This provision is estimated to cost $173 million over the next 10 years.
- Ends Subsidies for Big Oil
The bill closes six different tax loopholes for large international oil companies, including tax breaks related to last-in first-out accounting methodology, foreign tax credits, deductions for manufacturing, intangible drilling costs, percentage depletion allowance, and tertiary injectants. Together, eliminating these tax subsidies for the largest oil companies will save $44.8 billion over 10 years. These changes to the tax code were all part of the President’s 2013 Budget Request.