FEDERAL-TAX EFFECTS ON THE FINANCIAL ATTRACTIVENESS OF RENEWABLE VERSUS CONVENTIONAL POWER-PLANTS

In this paper, we examine the effects of federal tax laws on the finan cial attractiveness of seven renewable and four conventional electric power generating technologies adopted by investor owned utilities (IOU s) and non-utility electricity generators (NUGs), The results show tha t federal income tax laws applicable to renewable generating technolog ies generally provide very attractive financial incentives for the ado ption of these technologies by IOUs and NUGs. If an IOU or NUG is subj ect to the alternative minimum tax, however, it may not be able to tak e full advantage of these financial incentives.