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Energy Provisions of the American Recovery and Reinvestment Act of 2009
Herb Stevens
Residential Energy Efficiency Credit
• increases the energy tax credit for homeowners who make energy efficient improvements
• increases the credit rate to 30 percent of the cost of all qualifying improvements
• raises the maximum credit limit to $1,500 for improvements placed in service in 2009 and 2010
Residential Energy Efficiency Credit cont’d
• Energy-efficient improvements include:
– adding insulation
– exterior windows
– heating
– air conditioning systems
Residential Alternative Energy Credit
• nonrefundable energy tax credit
• help individual taxpayers pay for qualified residential alternative energy equipment
– solar electric
– solar hot water heaters
– geothermal heat pumps
– wind turbines
• credit equal to 30 percent of the cost of qualified property
Plug-in Electric Vehicle Credit
• vehicles must be newly purchased
• draw propulsion using a battery
– at least four kilowatt hours
– recharged from an external source of electricity
• minimum amount of the credit is $2,500 and the credit tops out at $7,500
– depends on the battery capacity
• credit reduced after the vehicle manufacturer has sold 200,000 vehicles
Plug-in Electric Vehicle Credit cont’d
• special tax credit for two types of plug-in vehicles
– certain low-speed electric vehicles
– two- or three-wheeled vehicles
• credit is 10% of the cost of the vehicle, up to a maximum credit of $2,500 for purchases made before Jan. 1, 2012
Extension of Renewable EnergyProduction Tax Credit
• extends eligibility date to end of 2012 for
facilities producing electricity from wind
• extends eligibility date to end of 2013 for
– biomass
– geothermal energy
– municipal solid waste
– qualified hydropower
– marine and hydrokinetic energy
• compare with solar to end of 2016
Election of Investment Creditin Lieu of Production Credit
• For facilities that produce electricity from wind and some other renewable resources
– owner may elect energy investment tax credit; or
– production tax credit
*May not claim both credits for the same facility
Coordination With Renewable Energy Grants
• Owner of property can apply for a grant
• if construction begins in 2009 or 2010, the grant can be claimed for energy investment credit property placed in service through 2016
• for qualified renewable energy facilities, the grant is 30% of the investment in the facility
Repeal of Certain Limits on Business Credits
for Renewable Energy Property
• repeals the $4,000 limit on the 30 percent tax credit for small wind energy property
• repeals limitation on property financed by subsidized energy financing
Bonus Depreciation Extended One Year
• Energy property is depreciated over 5 years
• For 2009 only, 50% of cost is depreciated in first year
New Clean Renewable Energy Bonds
• increases the amount of funds available to issue new clean renewable energy bonds
• qualified tax credit bonds can be issued to finance certain types of facilities that generate electricity from renewable sources
• For borrower - bonds are effectively at less than 1% interest
Qualified Energy Conservation Bonds
• increases the amount of funds available to issue qualified energy conservation bonds
• qualified tax credit bonds can be issued to finance governmental programs to reduce greenhouse gas emissions and other conservation purposes
DOE Loan Guarantee Program
• Additional funding to existing program - $6 billion
• DOE loan guarantee capped at 80% of project cost
• Supports new or improved technologies in
– renewable energy
– fuel cells
– advanced nuclear energy
– carbon capture and storage
New Tax Credit for Manufacturing
• For projects which expand or establish manufacturing of “advanced energy property”, including
– renewable energy
– fuel cells, energy storage
– smart electric grids
– carbon capture
– plug-in electric vehicles
• Competitive bidding process for $2.3 billion of tax credits