| It's certainly no secret: the cost of renewable energy | | | | geothermal energy equipment that produces, uses or |
| production and its implementation can be extremely | | | | distributes energy derived from geothermal deposits. |
| high. This is the very reason why tax credits are | | | | A personal tax credit of 10% with a $300 maximum |
| often used to enable renewable energy sources to | | | | can be taken for geothermal heat pumps. |
| compete with fossil fuels. | | | | The federal government also included production tax |
| With rising oil and natural gas prices, the war in Iraq | | | | credits for renewable energies. These credits allow |
| and environmental problems centering on global | | | | companies to invest in renewable technologies and |
| warming and air pollution, our nation is concerned | | | | write the investment off against other investments. |
| about their energy security and environmental issues. | | | | This was a major push of support for renewable |
| The United States is recognizing the need and power | | | | energy technologies. The credit was extended until |
| of renewable energy and is supporting its | | | | December 31, 2008. The credits are 1.9 cents per |
| development through federal income tax credits and | | | | kWh for wind, geothermal, closed-loop biomass and |
| incentives. | | | | 1.0 cent per kWh for hydroelectric power, landfill gas, |
| President George Bush signed the Energy Policy Act | | | | municipal solid waste and open-loop biomass. These |
| of 2005 into law on August 8, 2005. It took over | | | | pertain to the first ten years of operation |
| four years for Congress to pass after reviewing | | | | Similar to production tax credits, there were also |
| several different versions. It extended tax credits for | | | | provisions for renewable energy production incentives |
| wind and biomass energies for two more years and | | | | (REPI) for state and local governments, as well as, |
| included additional tax credits for solar, geothermal | | | | nonprofit electrical cooperatives. The enacted law |
| and ocean energy. | | | | included new qualifying energy generation facilities for |
| Solar tax credits apply to residential and business | | | | solar, wind, biomass (excluding municipal solid waste |
| users. This tax credit would pertain to eligible | | | | combustion) landfill gas and certain types of dry |
| equipment installed between 1/1/06 and 12/31/08. | | | | steam geothermal energy. It was extended through |
| The equipment installed would include those solar | | | | fiscal year 2016 and also included ocean and wave |
| systems that generate electricity, heat and cool or | | | | energy. |
| provide hot water to structures. It must also be | | | | These credits will be applied to any amount that |
| operational in the first year the credit is taken and | | | | remains after any other state or utility incentives |
| the taxpayer must be the original user. The credit is | | | | have been taken. There are numerous states that do |
| 30% with a $2,000 cap for each unit for residential | | | | offer incentives also. Some new state incentives |
| taxpayers and it is 30% with a no business cap | | | | include a California state rebate program for |
| specified for corporate users. After 12/31/08 the | | | | photovoltaics, an Illinois state grant program for wind |
| corporate tax credit will return to 10%. | | | | energy, a New Jersey state rebate program for |
| The geothermal corporate credit remains at 10% | | | | geothermal heat pumps and a Pennsylvania property |
| with no maximum stated. This credit does not apply | | | | tax assessment for wind energy. These are just a |
| to geothermal heat pumps and is limited to | | | | few of the many state incentives that exist. |