Florida Revives Lapsed Tax Credits for Renewable Electricity

On April 14, 2012, Florida enacted H.B. 7117 [1], the state’s first comprehensive energy law in four years.  Passing with overwhelming bipartisan majorities in the House and Senate, the law includes several provisions for clean energy, including a renewal of renewable electricity production tax credits that were allowed to expire in 2010.  Independent analysis [2] suggests the law’s package of incentives will support around 3,000 jobs in all economic sectors and generate tax revenue that will match and exceed the cost of the incentives within a three year window.

Among the law’s key provisions are:

• A production tax credit of $0.01 per kilowatt-hour of renewable electricity.  For fiscal year 2012-2013, up to $5 million of credits may be claimed, while $10 million of credits will be available annually from fiscal year 2013-2014 through fiscal year 2016-2017.
• An investment tax credit for capital costs, operations and maintenance, and research and development costs related to investment in the production, storage, and distribution of biodiesel, ethanol, and other renewable fuels. Up to $10 million of credits will be available annually from July 2012 to July 2016.
• Mechanisms to support residential and commercial energy efficiency improvements, rebates for renewable energy technologies, and rules for awarding the bill’s incentives.
• Rescission of a directive for the Public Service Commission to develop a Renewable Portfolio Standard of 20% renewable energy by 2020.
• The new law also removes some barriers to electric vehicle charging by defining it as a public service. 

Florida Department of Agriculture and Consumer Services Commissioner, Adam H. Putnam, said, “The bill offers technology-agnostic tax credits to businesses that demonstrate investment in energy production and create jobs in Florida.  Any form of renewable energy is eligible; the market will determine how investments are made.”  Overall, supporters of H.B. 7117 view it as an important step for establishing a long-term energy policy in Florida and encouraging investment in renewable energy.

Florida Department of Agriculture and Consumer Services Press Release [3]

Florida Department of Agriculture and Consumer Services - Economic Analysis Link [4]