More details on the energy bill and solar tax credits...
Maybe it is a good thing my paperwork for rebate approval has been delayed. I'm going to have to stall out the installation until 1/1, but the approval window is only 6 months long,and has to be done B4 12/31 to get $2.80/watt; timing, Ratty, timing. Well, maybe not installation,but "placed in service"...
"2. What about systems that have been purchased but not installed?
Should you sell a system and even start work this year, but do not
complete "original installation" of the system or "place it in service"
until Jan. 1, it will qualify for the credit."
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Yes, one of the only good things about BushCo's pork barrel energy
bill for oil, gas, coal and nuke power is the 30% tax break for
homeowners.
It expires in 2 years and has a $2000.00 cap (for residential
applicants no cap for business of course). Here is a link that
summarizes the details:
solarray.com
If you have ever considered RE and make enough money to pay $2000.00 a
year or more in taxes, this might be a good time to get serious about
making such an investment.
Todd
Mt. Shasta
Incentives and Rebates for Solar Energy
New Energy Bill includes 30% Tax Break for Solar!
Reprinted from a recent SEIA newsletter:
1. Solar Industry Secures Strongest Federal Tax Provisions in a Generation
A. Energy Bill Passes Congress, Will Be Signed Into Law by
President BushCo
The Senate and House have overwhelmingly passed the Energy Bill, which
now goes on to President Bush for his signature next week. In previous
years, the Energy Bill was hung up in the Senate; its passage today
assures that the solar provisions will become law. Once again, the
final solar provisions are as follows (see FAQ for more details):
Increases the existing 10% tax credit for commercial solar installations
to 30% for two years; no cap on amount of credit; applies to all
property placed in service after December 31, 2005 and before January 1,
2008; credit reverts to the permanent 10% credit thereafter
Creates a new 30% tax credit for residential solar installations for two
years; capped at $2000; applied to all property placed in service after
December 31, 2005 and before January 1, 2008
B. Policy Outlook and Industry Support
Due to restrictions on the price tag of the overall energy bill,
Congress capped all tax incentives for all energy technologies for two
years in the energy bill. However, SEIA will work to expand the solar
incentives this fall during the development of the tax extenders bill.
In addition, we are working at the state level to develop incentives
that complement these federal credits and open up more markets for
solar.
The network of support we have built - your resources and experience -
will be critical as we work to extend the tax credits. We urge all
members to continue your involvement in SEIA's legislative efforts, and
to encourage those companies that are not yet members to join SEIA. All
companies in the U.S. solar industry have a stake in extending the
federal credits, and all those companies should be actively working with
the association to strengthen our industry.
C. Frequently Asked Questions (FAQ) on the Solar Tax Credits
This FAQ sheet should answer many of the questions facing companies in
the solar energy industry about the federal solar tax credits. While
we have to be very clear that SEIA cannot offer you tax advice, which
can ultimately only come from your tax professional, this document
should provide some initial guidance based on the legislative text.
In the coming weeks, SEIA will be working with the IRS to obtain formal
guidance on these issues, and will keep you informed about the forms and
procedures you will need to claim this valuable credit. All materials
will be available Monday on SEIA's new and improved website at
www.seia.org.
The original legislation is enclosed as an attachment. We encourage you
to send questions to us at info@..., so that we can obtain clarity
on these key issues for you as soon as possible.
Business Credit vs. Residential Credit
Business credit
Residential credit
Old Incentive
10%
None
New Incentive
30%
30%
Credit window
1/1/06 - 12/31/07 at 30%; reverts to permanent 10% thereafter
1/1/06 - 12/31/07
Cap
No cap
$2,000 per system/ for each solar technology
Eligible technologies
PV, CSP, solar hybrid lighting, solar domestic water heating (excluding
pool heating)
PV, solar domestic water heating (excluding pool heating)
1. What are the dates of the credit? Is it applicable to existing
systems?
The credits become available for systems that are "placed in service"
-activated - between January 1, 2006, and December 31, 2007. If the
installation is on a new home, the "placed in service" date is the date
of occupancy by the homeowner.
Systems that have already been installed are not eligible.
2. What about systems that have been purchased but not installed?
Should you sell a system and even start work this year, but do not
complete "original installation" of the system or "place it in service"
until Jan. 1, it will qualify for the credit.
3. Can this credit be applied to capacity additions? (i.e. I have a
1.5 kW system and I want to add 1.5 kW more.) Similarly, can I apply
this credit to used equipment going into a new installation?
This is not entirely clear at present. However, the language would
suggest that both scenarios are allowed - the credits apply to the
amount of expenditure on solar energy property in a given year. SEIA
will work with the IRS to develop regulations favorable to the solar
industry. We will pass on additional information as it becomes
available.
4. How does the residential cap on expenditures operate?
An individual can take the 30% credit up to a $2,000 cap for
photovoltaics, while also taking the 30% credit up to a separate $2,000
cap for solar water heating. The credit may be carried over to future
years.
Business entities have no cap on the total credit amount, provided they
have a sufficient tax liability. Businesses have 20 years in which to
take the credit.
5. How does the credit work with existing state credits or utility
incentives?
The credit applies to the basis remaining after any state or utility
incentives available to the taxpayer have been taken.
Example: a $10,000 system that receives $5,000 in state incentives would
be eligible for a $1,500 Federal credit.)
6. Are there any changes to the business solar tax credit other than
percent?
The business solar tax credit will continue to be administered as
before; all that has changed is the percentage increase to 30%.
Operation and legal technicalities of the business credit are well
established. An accountant or tax professional familiar with these
rules should be able to inform you on any specific issues.
7. Why are the incentives for only two years? Can they be
expanded?
Congress capped all tax incentives for all energy technologies for two
years in the energy bill. SEIA will work to have these incentives
expanded this fall during the development of the tax extenders bill. In
addition, we are working at the state level to develop incentives that
complement these federal credits and open up more markets for solar.
D. Summary of Other Key Provisions in the Energy Bill
Below, please find a basic summary of other relevant provisions in the
Energy Bill. Contact Colin at cmurchie@... with any questions on
these provisions.
Title II - Renewable Energy
201
Resource Assessment - DOE to complete an assessment of the available
renewable resources in the US.
202
REPI (Renewable Energy Production Incentive) - per-kWh Production Tax
Credit - style incentive to municipalities, tribes, rural co-ops and
others unable to take the conventional PTC. No specific authorized
funding level.
203
Federal Purchase Requirement - requires Federal agencies to acquire a
specified percentage of their electricity (3% in 2007 rising to 7.5% by
2013) from renewables. Double credit for production on Federal or
tribal lands or buildings.
204
Federal Photovoltaics Purchase - Secretary of Energy to procure at
least 150 MW of PV over 2006 - 2010 timeframe for use on Federal
buildings. $50 - $60M / year authorized.
206
Residential Rebate Program - DOE to offer rebates with some
restrictions to homeowners who purchase PV, small wind, or biomass
energy (high-efficiency woodstove) equipment under low income
weatherization assistance program. No specific authorized funding
level.
207
"Sun Wall" at DOE - authorizes one time $20M expenditure for
construction of photovoltaic "Sun Wall" project at DOE headquarters.
209
Rural Electrification Grants - $20M authorized annually for
transmission and generation construction - including renewables - for
rural electrification purposes.
241
Insular Areas Energy Security - DOE / DOI to develop plans for island
energy security & disaster hardening. Includes some provision for
distributed solar.
Title IX - Research and Development
921
Distributed Generation R&D - ca. $240M / year authorized to be expended
on distributed generation research.
924
Portable Power Demonstrations - Distributed generation R&D to include
demonstrations of portable power projects & university partnerships.
925
Electricity Reliability - R&D programs to include studying integration
of residential and distributed generation.
931
Renewable Energy R&D - authorizes $631M in renewable energy R&D for
2007, rising to $852 in 2000.
935
Solar Energy R&D - $140M in 2007 rising to $250 in 2009 for solar R&D.
934
Concentrating Solar Power Research - specifically authorized by
Congress.
935
Solar & Renewables on Public Buildings - ca. $40M each year of solar
budget to be used for 40% Federal cost share of solar, other renewable
generation on public buildings.
Title XII - Electricity
1251
Net Metering - State utilities commissions to consider requiring net
metering within two years; not explicitly retail rate; requirement for
consideration waived if legislature or state PUC has ruled on it
previously.
1252
Time Based Rates - State utilities commissions to consider requiring
time based rates within two years; requirement for consideration waived
if legislature or state PUC has ruled on it previously.
1254
Interconnection - State utilities commissions to consider requiring
IEEE 1547 - based interconnection within two years; requirement for
consideration waived if legislature or state PUC has ruled on it
previously.
Title XVIII - Studies
1827
Costs and Incentives for Metered Passive Solar - DOE to perform a study
on comparative price and incentive levels of metered passive solar vs.
photovoltaics.
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