It is old news by now that the U.S. Congress has approved legislation that would extend the investment tax credit (ITC) for solar and resurrect the production tax credit (PTC) for wind power projects. Barring some unforeseen - at press time - hiccup, renewable project developers face the new year with a little more breathing room.

According to provisions in the omnibus spending bill, the ITC is extended for five years, according to a gradual draw-down schedule.

For commercial and utility-scale projects, the credit is now dependent on the “beginning of construction” date. If construction begins before 2020, for example, the facility still qualifies for a full 30% credit. If construction begins in 2020, the facility qualifies for a 26% credit. If construction begins in 2021, the facility qualifies for a 22% credit. If construction begins after 2021 - or if construction begins before 2022 but the facility is not placed in service before 2024 - the facility qualifies for a 10% credit.

The same percentages apply to the residential credit (25D), except that the project has to be completed by the specified dates (i.e., the beginning of construction doesn’t matter).

“Nobody was really surprised that the deal happened,” says Gregory Jenner, co-chair of the Stoel Rives energy team and head of the firm’s Washington, D.C., office. “What is surprising is the way it happened.”

The ITC and PTC provisions were apparently the result of horse trading between members of Congress. The price for the support of many Republican representatives seems to have been the inclusions that would invigorate fossil fuel research and exploitation.

In addition to the 12 appropriations bills and national security, immigration and other provisions, the package also lifts a ban on U.S. oil exports that had been in place for 40 years. Although the combination of incentives for renewables and a renewal of oil exports fits an “all of the above” energy policy espoused by many, some analysts say the latter provision may have the most long-lasting effect on U.S. energy policy.

At the moment, the world seems awash in oil, so there probably won’t be a significant outpouring of U.S. crude. However, now that the technology - in the form of hydraulic fracturing - has been commercialized and the legal barriers to export have apparently been lifted, the U.S. at least has the potential to become one of the world’s foremost suppliers of petroleum.

Against this potential are the actual incentives for continuing the renewable energy revolution. The solar sector, in particular, now has the means to really capitalize on the dramatic reductions in costs that have taken place over the last few years. The economics of solar power appear strong, and there is every expectation that increased demand will make it even more attractive in the future.

Nevertheless, all good things must come to an end. The ITC twilight has been postponed, not revoked.

“I would expect that most developers will see this extension as the last one,” Jenner says.

It is also worth noting that the omnibus bill allocates $323 million for the U.S. domestic fusion energy program. So don’t procrastinate.