The American Recovery and Reinvestment Tax Act of 2009 (2009 Recovery Act) extends the placed-in-service date for renewable energy production facilities and allows certain facilities placed in service in 2009 and 2010 to elect to claim the investment tax credit in lieu of the production credit.

Qualified facilities are generally facilities that generate electricity using qualified energy resources. Qualified energy resources include wind, refined coal, closed-loop biomass, open-loop biomass, geothermal energy, solar energy, small irrigation power, municipal solid waste, and qualified hydropower production. To be eligible for the renewable electricity production credit (REPC), electricity produced from qualified energy resources at qualified facilities must be sold by the taxpayer to an unrelated person. In addition, these facilities must be placed in service by a certain date.

Highlights of the 2009 Recovery Act provisions related to renewable energy production facilities include the following:

Long-term extension and modification of renewable energy production tax credit. The 2009 Recovery Act extends the placed-in-service date for wind facilities for three years, through December 31, 2012. The 2009 Recovery Act also extends the placed-in-service date for closed-loop biomass, open-loop biomass, geothermal, small irrigation, hydropower, landfill gas, waste-to-energy, and marine renewable facilities for three years, through December 31, 2013.

Temporary election to claim the investment tax credit in lieu of the production tax credit. Facilities that produce electricity from wind, closed-loop biomass, open-loop biomass, geothermal, small irrigation, hydropower, landfill gas, waste-to-energy, and marine renewable energy are eligible for the production credit. However, the 2009 Recovery Act allows wind property that is placed in service between 2009 and 2012, and other renewable energy property placed in service between 2009 and 2013, an election to claim the investment tax credit in lieu of the production tax credit.