The agency also said the average contract price at which electricity from wind projects was sold last year in the US was 5.54¢ a kilowatt hour. The tax credit would have phased out last year if the average electricity price had exceeded 8¢ a kilowatt hour.

Section 45 of the US tax code allows a tax credit for anyone generating electricity from wind, “closed-loop” biomass or poultry litter. The power plant must be in the United States. “Closed-loop” biomass means plants grown exclusively for use as fuel in power plants. Projects must be in service by the end of next year to qualify; however, Congress will probably extend the deadline through 2006 this fall. The credits run for 10 years after a project is in service. The credit amount is adjusted each year for inflation. The credit amount is announced each April for the prior year. This year the announcement was delayed until late June.

The IRS said it is not aware of any closed-loop biomass or poultry litter projects that were in operation last year. The IRS announcement is Notice 2002-39.