Energy sustainability - Year-end update 

October 24:  Congress adjourned for the November elections without extending a number of expired and expiring provisions that affect the energy sector.

Below are tables that list:


  • Energy incentives that are set to expire at the end of 2012
  • Provisions expiring in 2013 and beyond
  • Various provisions that have already expired

Congress is expected to convene after the November elections and may consider legislation to extend expired and expiring provisions at that time.

Expired provisions

Incentive* Expiration
Cash grant in lieu of tax credits Must place in service or begin construction by December 31, 2011
Biodiesel and renewable diesel (40A, 6426, 6427) December 31, 2011
Alcohol and ethanol (40, 6426, 6427) December 31, 2011
Alternative fuels (6426, 6427) December 31, 2011 (2014 for liquefied hydrogen)
Non-business energy efficiency improvements (25C) December 31, 2011
Energy efficient home manufacturer’s credit (45L) December 31, 2011
Energy efficient appliance manufacturer’s credit (45M) December 31, 2011
Plug-in conversion vehicles (30B) December 31, 2011
Alternative fuel refueling property (30C) December 31, 2011 (2014 for liquefied hydrogen)
Refined coal credit (45) December 31, 2011 (December 31, 2010 for steel industry fuel)
Qualified advanced energy project credit (48C) No expiration date- $2.3 billion in initial allocation exhausted in January 2010

*References are to IRC sections

Expiring provisions

Incentive* Expiration
Production tax credit (PTC)—wind (45) December 31, 2012
Investment tax credit (ITC) in lieu of PTC for wind (48) December 31, 2012
Cellulosic biofuels producer credit (40) December 31, 2012
Bonus depreciation for cellulosic biofuel plant property (168(l)) December 31, 2012
Indian coal credit (45) December 31, 2012
PTC for biomass, geothermal, hydropower, marine/hydrokinetic (45) December 31, 2013
ITC in lieu of PTC for biomass, geothermal, hydropower, marine/hydrokinetic (48) December 31, 2013
Energy efficient commercial building deduction (179D) December 31, 2013
Refinery expensing (179C) December 31, 2013
Fuel cell vehicles (30B) December 31, 2014
ITC for all property except for non-heat pump geothermal property (48) December 31, 2016 (solar ITC credit amount reduces to 10% after December 31, 2016)
Residential energy efficient property credit (25D) December 31, 2016

*References are to IRC sections

KPMG observation

Perhaps the most significant of the incentives set to expire at the end of 2012 is the section 45 production tax credit (PTC) for wind facilities. Under current law, taxpayers can claim a 2.2 cents per kilowatt hour tax credit for a 10-year period. The credit rate is adjusted annually for inflation.


Various legislative proposals have been introduced throughout the year which would extend the PTC for an additional year or longer. Most recently, on August 2, 2012, the Senate Finance Committee approved the chairman’s modification to the Senate “extenders bill”—the Family and Business Tax Cut Uncertainty Act of 2012. The legislation includes a one-year extension of the section 45 production tax credit (PTC) for wind facilities, to projects which are placed in service by December 31, 2013.


The Senate extenders bill would further modify the PTC to allow renewable energy facilities that “begin construction” before the end of 2013 to claim the PTC. In addition, currently taxpayers may claim a 30% section 48 investment tax credit (ITC) for renewable energy projects in lieu of the PTC so long as such projects are placed in service during the applicable PTC expiration dates. The one-year PTC extension and “begin construction” provision would also apply to the ITC in lieu of PTC.


PTC extension has its opponents as well. On September 24, 2012, a group of 47 House Republicans called for an end to the PTC for wind in a letter submitted to Speaker John Boehner (R-Ohio).


The Senate extenders bill also includes extensions of many additional provisions that have already expired or that are set to expire at the end of 2012 and beyond, such as those for energy efficient home improvements; alternative fuels and alternative fuel refueling property; cellulosic biofuel producers and bonus depreciation for cellulosic biofuel plant property; and several others.


For more information, contact a KPMG tax professional:


John Gimigliano

(202) 533-4022




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For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

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©2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.