Renewable Energy Tax Credits – Greener in More Ways Than One

March 31st, 2010 | by ADMIN |

It’s certainly no secret: the cost of renewable energy production and its implementation can be extremely high. This is the very reason why tax credits are often used to enable renewable energy sources to compete with fossil fuels.

With rising oil and natural gas prices, the war in Iraq and environmental problems centering on global warming and air pollution, our nation is concerned about their energy security and environmental issues. The United States is recognizing the need and power of renewable energy and is supporting its development through federal income tax credits and incentives.

President George Bush signed the Energy Policy Act of 2005 into law on August 8, 2005. It took over four years for Congress to pass after reviewing several different versions. It extended tax credits for wind and biomass energies for two more years and included additional tax credits for solar, geothermal and ocean energy.

Solar tax credits apply to residential and business users. This tax credit would pertain to eligible equipment installed between 1/1/06 and 12/31/08. The equipment installed would include those solar systems that generate electricity, heat and cool or provide hot water to structures. It must also be operational in the first year the credit is taken and the taxpayer must be the original user. The credit is 30% with a $2,000 cap for each unit for residential taxpayers and it is 30% with a no business cap specified for corporate users. After 12/31/08 the corporate tax credit will return to 10%.

The geothermal corporate credit remains at 10% with no maximum stated. This credit does not apply to geothermal heat pumps and is limited to geothermal energy equipment that produces, uses or distributes energy derived from geothermal deposits. A personal tax credit of 10% with a $300 maximum can be taken for geothermal heat pumps.

The federal government also included production tax credits for renewable energies. These credits allow companies to invest in renewable technologies and write the investment off against other investments. This was a major push of support for renewable energy technologies. The credit was extended until December 31, 2008. The credits are 1.9 cents per kWh for wind, geothermal, closed-loop biomass and 1.0 cent per kWh for hydroelectric power, landfill gas, municipal solid waste and open-loop biomass. These pertain to the first ten years of operation

Similar to production tax credits, there were also provisions for renewable energy production incentives (REPI) for state and local governments, as well as, nonprofit electrical cooperatives. The enacted law included new qualifying energy generation facilities for solar, wind, biomass (excluding municipal solid waste combustion) landfill gas and certain types of dry steam geothermal energy. It was extended through fiscal year 2016 and also included ocean and wave energy.

These credits will be applied to any amount that remains after any other state or utility incentives have been taken. There are numerous states that do offer incentives also. Some new state incentives include a California state rebate program for photovoltaics, an Illinois state grant program for wind energy, a New Jersey state rebate program for geothermal heat pumps and a Pennsylvania property tax assessment for wind energy. These are just a few of the many state incentives that exist.

The United States government and the individual states are promoting renewable energy sources as an energy source to be encouraged. With all the incentives available, this may be one of the best times to make your air cleaner with a commitment toward this energy. With everyone’s support we can recharge renewable energy’s development.

Matthew Hick

  1. 5 Responses to “Renewable Energy Tax Credits – Greener in More Ways Than One”

  2. By Dustin K on Mar 31, 2010 | Reply

    Is it time for a social uprising?
    We could use $7,000,000,000 to become energy independent. We could use the money in a brand new energy bill. The new energy bill would help guide a process that would pay for research and design, update infrastructure, give subsidies to renewable energy companies subsidies to farmers, and small business grants for start-up green energy contractors and the companies who would manufacture the equipment necessary for conversion. The bill would help create thousands of new small businesses which would hire millions of Americans, and help grow existing green energy companies.

    I called for Obama, my candidate, to return to congress 2 1/2 weeks ago (before McCain) and it fell on def ears. Now im asking him to change his tone on the bailout bill and call for a new energy bill instead. Im right. Dont doubt it. The Question is.. are the people in Obama’s inner circle capable of thinking freely or are they focused on bailing out their own "401k’s" and other investments? Im gonna vote for Obama, because his core principles are the same as mine. His policies are for the most part innovative and progressive. But he needs to start thinking independently from his advisers. He needs to start listening to the people who matter. Me.. im as middle class as it gets. Im a sub-urban 25 year old white guy with a 2 year old daughter and a dog. Im in real estate, im losing money, I cant pay my bills, and my clients cant get credit. Im willing to sacrifice my career in order to stop this bailout.

    Americans have lived off of credit for to long. We dont even remember what it’s like to save money and pay cash for our homes and cars like our parents and grandparents did. Because of our credit addiction the dollar is inflated and the price of commodities has sky-rocketed. We need to become an ownership society again, not slowly progress into a bank dependent one. After almost 100 years of living off of a credit system which creates money out of thin air, our federal government and the federal reserve (which is no more federal than fed-ex) have proven that the credit system is flawed. Promoting ownership and reverting to the old monetary system which backed our money with gold bullion is the right way to run our country and is whats best for our people.

    Because of our flaws as a people. Because of our flaws as a country, this generation, the most selfish generation must step up and allow themselves to suffer. We may have to go head first into a depression, but just like the great depression we will come out a stronger, better country than we were before. Sacrifice by our forefathers is what made our country great. Whether you like it or not, whether you are able to admit it to yourself, you know as well as I do that this country has lost it’s way. How will history remember us? Its time to stand up, stop whining, and start being Americans. If it calls for social uprising we must meet it. If it calls for revolution we must revolt. If it calls for sacrifice we must suffer. Sadly, I believe from the bottom of my heart, this will never happen. Our federal government has divided, manipulated, and bribed our people for too long. The violent and non violent protests that made our people strong for over 200 years ended with a thud some time before I was born in the early 1980’s. My generation is silent, oppressed, and absorbed by digital media. We are weak, lazy, and inebriated. This may be the end of the American dream. What would the great society of the 1950’s have to say if they knew what a fat, lazy people we have become?

  3. By b123153h on Mar 31, 2010 | Reply

    some of your ideals are flawed and the people I have talked to say there is too much goverment.
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  4. By DukeofDixie on Mar 31, 2010 | Reply

    Yes and the first one to hang is Pelosi
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  5. By portnoy25 on Mar 31, 2010 | Reply

    I’m a McCain guy and agreed with 90% of what you said, basically everything but the Obama part. The only problem is that if you save, scrimp and don’t live off of credit buying extravagances, you end up getting your rear end taxed off to pay for those who do. I could’ve refinanced my house, took out more cash, went to Hawaii a few times, bought some Escalades and a boat and the Dems would be crying about the evil bank that gave me the loan that I could no longer afford with interest rates and prices rising. Instead, I used the interest rate drop to move from a 30 year to a 15 year and now I’ll get taxed up the kazoo because of the people who did what I didn’t.
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  6. By websterbackhoe on Mar 31, 2010 | Reply

    oh please don’t do that, don’t free us in united states of america the land of the free.
    that is a bad idea, please take all of our money….and charge us interest.
    oh hey, lets give our money to the market and they can charge us even more interest.
    let the fat money hungry so n so’s build the system up from the ground up….or do they need a a FREE HAND OUT using my money again.

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