With expanded and enhanced tax credits and other incentives from the recent federal stimulus bill, NOW is the time to do energy efficiency upgrades on your home and install the renewable energy system of your dreams! There are several helpful resources listed below, but you can always find up-to-date incentive information on Minnesota renewables and efficiency at DSIRE.
ENERGY STAR has a fantastic listing of federal tax credits for energy efficiency improvements, which has now been updated with significant changes from President Obama’s recent stimulus bill. Highlighted changes are:
- The tax credits that were previously effective for 2009, have been extended to 2010 as well.
- The tax credit has been raised from 10% to 30%.
- The tax credits that were for a specific dollar amount (i.e. $300 for a CAC), have been converted to 30% of the cost.
- The maximum credit has been raised from $500 to $1500 for the two years (2009–2010). However, some improvements such as geothermal heat pumps, solar water heaters, and solar panels are not subject to the $1,500 maximum.
- The $200 cap on windows has been removed.
Small Wind & Solar:
The stimulus bill also includes a provision to uncap the federal small wind turbine Investment Tax Credit (ITC) originally passed last October. The removal of the cost caps on the small-wind ITC, the industry’s top legislative priority, will provide consumers with a true 30% tax credit for the purchase and installation of small wind turbines with rated capacities of 100 kilowatts or less. For a summary of the previous federal small-wind ITC passed in October, click here to visit the American Wind Energy Association’s Web site.
The $787 billion stimulus bill contains a number of other provisions potentially benefitting small wind—and also solar power—such as:
- The option to receive a cash grant through the US Treasury in lieu of the ITC. Taxpayers that are eligible for an investment tax credit can receive an equivalent financial grant from the Department of Treasury instead of claiming the credit.
- An expansion of the Clean Renewable Energy Bond (CREB) program by $1.6 billion to finance facilities that generate electricity from a number of renewable resources, including wind.
- Expanded research and development funding of $1.25 billion through the Department of Energy’s Energy Efficiency and Renewable Energy program.
- Workforce training for renewable energy and energy efficiency careers.
- A new loan guarantee program through the Department of Energy for “commercial” and “innovative” technologies related to generation, transmission, and manufacturing of certain energy equipment.
- Repeal of subsidized energy financing limitation on the ITC. Under current law, the amount of the investment tax credit must be reduced if the property qualifying for the investment tax credit is also financed with industrial development bonds or through any other Federal, state, or local subsidized financing program. The bill repeals this subsidized energy financing limitation on the investment tax credit in order to allow businesses and individuals to qualify for the full amount of the investment tax credit even if such property is financed with industrial development bonds, or through any other subsidized energy financing.
- A new competitive 30% manufacturing credit for investment in qualifying property used to “re-equip, expand, or establish” a manufacturing facility used to produce certain renewable energy equipment.
- Extension of bonus depreciation for businesses. Last year, Congress temporarily allowed businesses to recover the costs of capital expenditures made in 2008 faster than the ordinary depreciation schedule would allow by permitting these businesses to immediately write off fifty percent of the cost of depreciable property (e.g., equipment, tractors, wind turbines, solar panels, and computers) acquired in 2008 for use in the United States. The bill extends this temporary benefit for capital expenditures incurred in 2009.
- Five-year carryback of net operating losses for small businesses.