RSI Green Energy Solution:
Go green now, companies, schools and individuals it is time under the new U.S. Stimulus Package and small wind tax credits for homeowners and businesses.
Federal Grants For more information: [email protected]
U.S. Tax Credits of 30%, LOANS and GRANTS for Wind Projects
Grants and Tax Savings For All
RSI has researched the depreciation issues for the WindGen turbine, and had our tax research department look into it as well.
Fact: If the wind turbine is purchased and placed into service and is 100 KW or smaller, it can be depreciated over 5 years and is eligible for Section 179 and the 50% bonus depreciation.
Also, we can find no rulings that require the tax credit or grant to offset basis (which is 30% right now on wind). This means that the full cost of the wind turbine is eligible to be depreciated. And you get 30% as a grant or tax credit also when you install a unit.
Fact: In December 1998, the Kansas legislature enacted a property tax examption for all property actually and regularly used in the generation of electricity from renewable resources, whether it is industrial, commercial, utility or personal application. Kansas State statute 79-201, Chapter 79 Taxation, article 2 - Property Exempt from Taxation.
NOTICE: The Rural Energy for America Program (REAP) which is a grant and guaranteed loan program to help small businesses and ag producers with energy efficiency improvements and renewable energy projects has an application deadline of June 30, 2010.
REAP Info Info Sheet Application Deadline Info REAP Application
Federal U.S. Tax credits are now available for home improvements:
Small Wind Energy Systems
Residential Small Wind Turbines
Has nameplate capacity of not more than 100 kilowatts.
30% of the total cost
Must be in service before December 31, 2016.
US Treasury 30% Tax Credit and Grants for Wind Turbine(s) FAQ
Q: What does the stimulus package mean for you?
A: The entire cost of a wind system (plus installation) is reduced by 30 percent. Depending on where you live, you could save much more! The stimulus package allows for a 30 percent tax credit on the total cost of multiple units. There is no cap on the 30 percent tax credit.
All States are also implementing rebates for small wind which can be added to the Federal credit. In the last two months alone, more than 33 States have introduced legislation that either expands incentives for renewable energy and/or addresses market barriers.
The stimulus package allows for a 30 percent tax credit on the total cost of multiple units. There is no cap on the 30 percent tax credit.
Q: Can Businesses get cash back rather than a tax credit – how does that work?
A: Yes, this applies to businesses only. You can apply for a grant from the US treasury and rather than a tax credit, receive a cash grant. As of June 30 2009.
The American Recovery and Reinvestment Act of 2009 (H.R. 1) allows taxpayers eligible for the federal business energy investment tax credit (ITC) to take this credit or to receive a grant from the U.S. Treasury Department instead of taking the business ITC for new installations. The new law also allows taxpayers eligible for the renewable electricity production tax credit (PTC) to receive a grant from the U.S. Treasury Department instead of taking the PTC for new installations. (It does not allow taxpayers eligible for the residential renewable energy tax credit to receive a grant instead of taking this credit.) Taxpayers may not use more than one of these incentives. Tax credits allowed under the ITC with respect to progress expenditures on eligible energy property will be recaptured if the project receives a grant. The grant is not included in the gross income of the taxpayer.
Federal Incentives/Policies for Renewables & Efficiency
Business Energy Investment Tax Credit (ITC)
Last DSIRE Review: 06/10/2009
||Corporate Tax Credit
|Eligible Renewable/Other Technologies:
||Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics, Wind, Biomass, Geothermal Electric, Fuel Cells, Geothermal Heat Pumps, CHP/Cogeneration, Solar Hybrid Lighting, Direct Use Geothermal, Microturbines
||Commercial, Industrial, Utility
||30% for solar, fuel cells and small wind;
10% for geothermal, microturbines and CHP
||Fuel cells: $1,500 per 0.5 kW
Microturbines: $200 per kW
Small wind turbines placed in service 10/4/08 - 12/31/08: $4,000
Small wind turbines placed in service after 12/31/08: no limit
All other eligible technologies: no limit
|Eligible System Size:
||Small wind turbines: 100 kW or less
Fuel cells: 0.5 kW or greater
Microturbines: 2 MW or less
CHP: 50 MW or less
||Fuel cells, microturbines and CHP systems must meet specific energy-efficiency criteria
||26 USC § 48
Note: The American Recovery and Reinvestment Act of 2009 (H.R. 1) allows taxpayers eligible for the federal renewable electricity production tax credit (PTC) to take the federal business energy investment tax credit (ITC) or to receive a grant from the U.S. Treasury Department instead of taking the PTC for new installations. The new law also allows taxpayers eligible for the business ITC to receive a grant from the U.S. Treasury Department instead of taking the business ITC for new installations. The Treasury Department issued Notice 2009-52 in June 2009, giving limited guidance on how to take the federal business energy investment tax credit instead of the federal renewable electricity production tax credit. The Treasury Department will issue more extensive guidance at a later time.
The federal business energy investment tax credit available under 26 USC § 48 was expanded significantly by the Energy Improvement and Extension Act of 2008 (H.R. 1424), enacted in October 2008. This law extended the duration -- by eight years -- of the existing credits for solar energy, fuel cells and microturbines; increased the credit amount for fuel cells; established new credits for small wind-energy systems, geothermal heat pumps, and combined heat and power (CHP) systems; extended eligibility for the credits to utilities; and allowed taxpayers to take the credit against the alternative minimum tax (AMT), subject to certain limitations. The credit was further expanded by The American Recovery and Reinvestment Act of 2009, enacted in February 2009.
In general, credits are available for eligible systems placed in service on or before December 31, 2016:*
- Solar. The credit is equal to 30% of expenditures, with no maximum credit. Eligible solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. Hybrid solar lighting systems, which use solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight, are eligible. Passive solar systems and solar pool-heating systems are not eligible. (Note that the Solar Energy Industries Association has published a four-page document that provides answers to frequently asked questions regarding the federal tax credits for solar energy.)
- Fuel Cells. The credit is equal to 30% of expenditures, with no maximum credit. However, the credit for fuel cells is capped at $1,500 per 0.5 kilowatt (kW) of capacity. Eligible property includes fuel cells with a minimum capacity of 0.5 kW that have an electricity-only generation efficiency of 30% or higher. (Note that the credit for property placed in service before October 4, 2008, is capped at $500 per 0.5 kW.)
- Small Wind Turbines. The credit is equal to 30% of expenditures, with no maximum credit for small wind turbines placed in service after December 31, 2008. Eligible small wind property includes wind turbines up to 100 kW in capacity. (In general, the maximum credit is $4,000 for eligible property placed in service after October 3, 2008, and before January 1, 2009. The American Recovery and Reinvestment Act of 2009 removed the $4,000 maximum credit limit for small wind turbines.)
- Geothermal Systems. The credit is equal to 10% of expenditures, with no maximum credit limit stated. Eligible geothermal energy property includes geothermal heat pumps and equipment used to produce, distribute or use energy derived from a geothermal deposit. For electricity produced by geothermal power, equipment qualifies only up to, but not including, the electric transmission stage. For geothermal heat pumps, this credit applies to eligible property placed in service after October 3, 2008.
- Microturbines. The credit is equal to 10% of expenditures, with no maximum credit limit stated (explicitly). The credit for microturbines is capped at $200 per kW of capacity. Eligible property includes microturbines up to two megawatts (MW) in capacity that have an electricity-only generation efficiency of 26% or higher.
- Combined Heat and Power (CHP). The credit is equal to 10% of expenditures, with no maximum limit stated. Eligible CHP property generally includes systems up to 50 MW in capacity that exceed 60% energy efficiency, subject to certain limitations and reductions for large systems. The efficiency requirement does not apply to CHP systems that use biomass for at least 90% of the system's energy source, but the credit may be reduced for less-efficient systems. This credit applies to eligible property placed in service after October 3, 2008.
In general, the original use of the equipment must begin with the taxpayer, or the system must be constructed by the taxpayer. The equipment must also meet any performance and quality standards in effect at the time the equipment is acquired. The energy property must be operational in the year in which the credit is first taken.
Significantly, The American Recovery and Reinvestment Act of 2009 repealed a previous limitation on the use of the credit for eligible projects also supported by "subsidized energy financing." For projects placed in service after December 31, 2008, this limitation no longer applies. Businesses that receive other incentives are advised to consult with a tax professional regarding how to calculate this federal tax credit.
The federal Energy Policy Act of 2005 (EPAct 2005) expanded the existing federal business energy tax credit for solar and geothermal energy property to include fuel cells, microturbines and hybrid solar lighting systems installed on or after January 1, 2006, and raised the credit for solar to 30%. Prior to the provisions of EPAct 2005, a 10% credit was available to businesses that invested in or purchased solar or geothermal energy property.
* Note that the credit for geothermal property, with the exception of geothermal heat pumps, has no stated expiration date. The credit for solar energy property reverts to 10% after December 31, 2016.
Public Information - IRS
U.S. Internal Revenue Service
1111 Constitution Avenue, N.W.
Washington, DC 20224
Phone: (800) 829-1040
Web Site: http://www.irs.gov