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Energy tax incentives in the American Recovery and Reinvestment Act |
The American Recovery and Reinvestment Act of 2009 contained three significant incentives for businesses considering an investment in renewable and alternative energy resources.
- The new Credit for Advanced Energy Property provides a 30 percent tax credit to manufacturers for the development of facilities that manufacture “advanced energy property” like solar or wind energy equipment or fuel cells.
- The existing Renewable Electricity Production Credit for wind, biomass, geothermal, solar and hydropower was extended for facilities placed in service through 2013 (through 2012 for wind energy facilities).
- The Energy Investment Credit for property used to generate energy from solar energy, fuel cells, geothermal or wind energy was enhanced by eliminating the $4,000 cap on the 30 percent credit for small wind energy. Also, the basis of property eligible for the energy investment credit is no longer reduced by subsidized energy financing.
In addition, for property placed in service in 2009 and 2010, a taxpayer can elect to forego the electricity production credit (based on kilowatt hours) and instead claim the investment credit for up to 30 percent of the facility’s costs. |