Federal Support for Developing, Producing, and Using Fuels and Energy Technologies (2016)

Author: Dinan, Terry; and U.S. Congressional Budget Office | Economics, U.S.

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Table 1. Energy-Related Tax Preferences, 2016
Type of Fuel or Technology Supported	Tax Preference	Estimated Total Cost (Billions of Dollars)	Expiration Date
Tax Preferences Affecting Income Taxes
Renewable Energy	Credits for the production of electricity from renewable resources	3.4	Various
	Credits for investments in solar and geothermal equipment, fuel cells, and microturbines	2.6	Various
	Credit for investment in advanced energy property, including property used in producing energy from wind, the sun, or geothermal sources	0.3	Fixed $2.3 billion in credit; available until used
	Five-year depreciation for certain renewable energy equipment	0.3	None
	*Total*	6.6
Fossil Fuels	Expensing of exploration and development costs for oil and natural gas	1.8	None
	Option to expense depletion costs on the basis of gross income rather than actual costs	0.9	None
	Exceptions for publicly traded partnerships with qualifying income derived from certain energy-related activities	0.9	None
	Amortization of costs of air pollution control facilities	0.5	None
	Credit for investment in clean coal facilities	0.2	Fixed dollar amount of credit; available until used
	15-year depreciation for natural gas distribution lines	0.2	12/31/2010
	Amortization of geological and geophysical expenditures associated with oil and gas exploration	0.1	None
	*Total*	4.6
Energy Efficiency	Residential efficiency property credit	1.1	12/31/2021
	Credit for energy-efficiency improvements to existing homes	0.5	12/31/2016
	Credit for new energy-efficient homes	0.4	12/31/2016
	Credit for plug-in electric vehicles	0.3	Expires for each manufacturer when the number of vehicles it sells reaches the limit set by the federal government
	Deduction for energy-efficient commercial buildings	0.2	12/31/2016
	10-year depreciation for smart meters or other devices for monitoring and managing energy use	0.1	None
	Electricity 15-year depreciation of certain property related to electricity transmission	0.1	None
	*Total*	2.6
Nuclear Energy	Special tax rate for reserve funds for nuclear decommissioning	0.2	None
Tax Preferences Affecting Energy-Related Excise Taxes
Renewable Energy	Biodiesel and renewable diesel credits	3.6	12/31/2016
Renewable Energy	Tax incentives for alternative fuels	0.6	12/31/2016
Grants in Lieu of Tax Credits Affecting Energy-Related Excise Taxes
Renewable Energy	Section 1603 grants	0.1	12/31/2011
All Energy-Related Tax Preferences
Total		18.4	n.a.

—Terry Dinan, Senior Adviser Microeconomic Studies Division, Congressional Budget Office
Before the Subcommittee on Energy Committee on Energy and Commerce, U.S. House of Representatives, March 29, 2017

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