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- Facilities placed in service before January 1, 2022, can claim up to 3.1 cents per kilowatt hour for wind and geothermal energy, while facilities placed in service after that date
only receive 3.0 cents per kilowatt hour (if prevailing wage and apprenticeship requirements are met). - Taxpayers should assess their eligibility for the PTC based on facility placement dates and confirm compliance with prevailing wage and apprenticeship requirements to maximize credits.
The IRS has released the 2026 inflation adjustment factor and reference prices for calculating the IRC Section 45 production tax credit (PTC) for qualified energy resources. Taxpayers originally could claim a PTC equal to 1.5 cents (adjusted annually for inflation) per kilowatt hour of renewable electricity produced at a qualified facility. The inflation adjustment factor for calendar-year 2026 is 2.0570. The 2026 reference price for facilities producing electricity from wind is 3.17 cents per kilowatt hour; because this price does not exceed the 8 cents multiplied by the inflation adjustment factor in IRC Section 45(b)(1), the phaseout of the credit under IRC Section 45(b)(1) does not apply for calendar 2025. Reference prices for facilities producing electricity from closed-loop biomass, open-loop biomass, geothermal energy, municipal solid waste, qualified hydropower production, and marine and hydrokinetic renewable energy have not been determined for 2026.
For facilities placed in service before January 1, 2022, the PTC is:
- 3.1 cents per kilowatt hour on the sale of electricity produced from wind, closed-loop biomass and geothermal energy
- 1.5 cents per kilowatt hour on the sale of electricity produced in open-loop biomass, landfill gas, trash, qualified hydropower, and marine and hydrokinetic facilities
For facilities placed in service on or after January 1, 2022, the PTC for electricity is 0.6 cents per kilowatt hour on the sale of electricity from all eligible technologies (3 cents if prevailing wage
and apprenticeship requirements are met). Implications Due to the rounding rules, the PTC for projects placed in service before and after January 1, 2022 (assuming prevailing wage and apprenticeship requirements are met) is not the same, with a 3.1 cents per kilowatt hour for project placed in service before January 1, 2022 and 3.0 cents per kilowatt for those placed in service on or after January 1, 2022. This is a change from the 2025 PTC, which was the same (3 cents) for projects placed in service before and after January 1, 2022 (assuming prevailing wage and apprenticeship requirements are met)
The information contained herein is general in nature and is not intended and should not be construed as legal, accounting, or tax advice or opinion provided by Ashmore Consulting LLC to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact Ashmore Consulting LLC or another tax professional prior to taking any action based upon this information. Ashmore Consulting LLC assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.
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