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Businesses located in rural counties of Ohio are eligible for REAP grants for solar arrays and wind turbines. 

Federal Incentives for Renewable Energy Systems

Federal Tax Credit

A 30% Federal Investment Tax Credit (ITC) is available on the cost of Solar Electric (PV) systems and Solar Thermal systems. This credit only applies to certain Wind systems (see below for a new credit available for small wind systems).

The 30% ITC is calculated on the Reimbursed System Cost. That is, the total cost of the system including materials, labor, permits, fees, taxes, shipping, etc. LESS whatever grants or rebates you received. Alternatively, you can treat the grant as separate income to your business, in which case you can calculate the 30% tax credit against the entire system cost. However, in that case you may need to pay Federal income tax on the state grant.

The Emergency Economic Stabilization Act of 2008, H.R. 1424 passed by Congress October 3, 2008 extended and improved the Federal Incentive Tax Credit (ITC) for solar systems for 8 more years through 2016. The American Recovery and Investment Act of 2009 (the Obama economic stimulus bill) signed 2/17/2009 also provides a number of significant new and enhanced Federal incentives. Starting Jan. 1, 2009 residential solar electric and solar thermal systems are eligible for the same 30% tax credit with no cap. The previous $2,000 cap on the Federal tax credit for residential solar and wind systems has been removed. There is now no cap or maximum on the ITC for both residential and non-residential (commercial) systems.

Wind Energy Investment Tax Credit

The Emergency Economic Stabilization Act of 2008 also added a new federal-level Investment Tax Credit to help consumers purchase wind turbines for home, farm, or business use. Owners of small to mid-size wind systems (<100 KW) can receive a credit for 30% of the total installed cost of the system, with no cap or maximum amount. The credit is available for equipment installed from January 1, 2008 through December 31, 2016. For turbines used for homes, the credit is limited to the lesser of $4,000 or $1,000 per kW of capacity, if installed in 2008. After 2008, there is no cap on the amount of ITC.


Federal 1603 Treasury Renewable Grants

The American Recovery and Reinvestment Act of 2009 (H.R. 1) allows eligible for-profit businesses to take the 30% ITC tax credit or to receive a grant for 30% of the system cost from the U.S. Treasury Department instead. This grant is called a 1603 grant. To receive a 1603 grant system, installations must have been started (or safe harbored) by the end of 2011.  Contact Dovetail or see the website listed below for details. Note that is grant is only available for new business system installations. Renewable energy systems owned by a non-profit and residential systems are not eligible for the 1603 Treasury grant, and can only take the investment tax 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 and is sold before the required holding period. The grant is not included in the gross income of the taxpayer.

See the DSIREUSA.org website for more details.

Federal Modified Accelerated Cost Recovery System (MACRS)

Businesses can also take advantage of a Modified Accelerated Depreciation Schedule for both Solar and Wind systems. H.R. 4853 enacted 12/17/2010 provides for 100% depreciation in one year retro-active to 9/09/2010; and a 100% depreciation in one year for systems installed in 2011. Equipment installed and commissioned in 2012 and 2013 qualify for a 50% bonus depreciation in Year 1.

After 2013, “Class life” is 6 years
  • Year 1: 20%
  • Year 2: 32%
  • Year 3: 19.2%
  • Year 4: 11.52%
  • Year 5: 11.52%
  • Year 6: 5.76%
Reference Information on Federal Incentives

The Database of State Incentives for Renewable Energy (DSIRE) provides grant and incentive information for Federal and every state program in the United States of America.

The Solar Energy Industries Association (SEIA) has produced a very useful guide on use of the Federal tax incentives. Contact Dovetail to obtain a copy of this guide.

The Tax Incentives Assistance Project (TIAP) website sponsored by a coalition of public interest nonprofit groups, government agencies, and other organizations in the energy efficiency field, provides consumers and businesses information they need to make use of the Federal income tax incentives for energy efficient products and technologies. This website has a lots of useful and up to date information.

Click here for more details on Residential Renewable Energy Federal Incentives

RURAL GRANTS: USDA Rural Energy for America Program (REAP)

Renewable Energy Credits (RECS) - Renewable energy credits (RECs), also known as green credits, green tags, or tradable renewable certificates, represent the environmental attributes of the power produced from renewable energy projects. You can sell the RECs generated by your system separately from and in addition to the electricity produced by your system. There are separate credits for solar systems and for wind systems. Currently, Solar Renewable Energy Credits (SRECs) are worth a good deal more than wind RECs.

Click here for exciting details on Dovetail's Solar Renewable Energy Credits (SRECs) purchase program. It can provide substantial additional financial value for your solar electric system.


 

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