Incentives for Renewable Energy Systems

A renewable energy system provides many benefits to individuals and organizations. Some of the benefits that motivate people to invest in a system are:

• Increasing piece of mind by shifting to safe, clean, reliable energy
• Reducing your energy costs after you have recovered your initial investment
• Protecting and improving the planet for future generations by reducing the production of green house gases and air pollutants
• Demonstrating responsible corporate stewardship and commitment to sustainable business practices
• Creating new, green jobs in a viable and emerging technology
• Locking in a fixed cost for some of your energy needs, which reduces the impact of rising utility energy prices
• Improving energy and national security by shifting to a local power source that is expected to last 5 billion years

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

Government incentives are available to reduce the cost of a renewable energy system!

These include:

• Federal Tax Credits and Accelerated Depreciation
• State Grants, such as those available from the Ohio Department of Development (ODOD) Energy Office
• Grants from the USDA
• Energy Efficiency Revolving Loan Fund
• Ohio Air Quality Development Authority
• Net Metering laws that require utility companies to reduce your bill based on the renewable energy your system produces
• Some states offer peak demand shaving via Time-of-Day metering

Return on Investment

As the efficiency of renewable energy systems improve and the costs continue to decline, they are becoming an increasing attractive investment capable of saving significant money. Most solar electric systems last 40+ years, solar thermal systems last 30+ years, and wind systems typically last 25 to 30 years. So once you recover your initial investment, you can realize substantial savings in energy costs over the life of a system.

The sun has provided for life on earth since the beginning of time. Using Solar and Wind Energy leverages this clean, reliable power source!

Typical Pay-back (return on investment) periods:

The figures above reflect net-metering systems displacing energy that would otherwise be purchased from a utility company.

When available, State grants and Federal tax incentives can offset 40% to 60% of a residential system’s cost. For commercial and farm systems, the offset can be much larger due to the Federal tax incentives, often more than 90% of the system cost. See the below presentation for details and examples of each type of system.

Federal Incentives for Renewable Energy Systems

Federal Tax Credit
The August 2005 Energy Bill provides a 30% Tax Credit on the cost of Solar Electric (PV) systems and Solar Thermal systems. This credit does not apply to Wind systems (see below for a new credit available for small wind systems). The 30% credit for solar 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 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 has 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 that is currently available for commercial systems. 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.

New Wind Energy 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 Modified Accelerated Cost Recovery System (MACRS)
Businesses can also take advantage of a 6 year Accelerated Depreciation Schedule for both Solar and Wind systems.

“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%

Additionally, equipment installed in 2008 and 2009 can receive bonus depreciation of 50% in Year 1

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) had produced a very useful guide on use of the Federal tax incentives. Note, however, that this guide has not been updated yet to reflect the October 3, 2008 changes in law. 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 new Solar Renewable Energy Credits (SRECs) purchase program. It can provide substantial additional financial value for your solar electric system.

See Economics of Solar & Wind Energy in Ohio (1.1 MB PDF file) to view or download a copy of Dovetail's presentation.

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 following sections provide a summary of the grant programs for Ohio and New York.

Ohio Tax Incentives

Ohio Revised Code Section 5709.46 exempts residential and commercial solar and wind systems from Property taxation, Sales Tax, Use Tax, and Ohio franchise tax. Ohio provides businesses a depreciation schedule of 5 years for renewable energy systems.

Ohio Renewable Energy Grants

Note: On January 27, 2009, Ohio announced availability of new grants for residential solar electric (PV) systems. Grants are also still available for businesses, schools, institutions, farms, local government entities, and other non-residential systems.

Ohio Grants for Non-Residential Systems

The Ohio Dept. of Development, Energy Office provides Advanced Energy Fund grants for non-residential systems under NOFA #08-09 announced May 1, 2008. These grants are available to businesses, farms, local government entities, and non-profit institutions, such as museums, hospitals, and schools. This NOFA replaced NOFA 07-02. There are grants available for Solar Electric (photovoltaic), Solar Thermal, and Wind systems. In order to qualify for a grant you must be in an Investor Owned Utility service area. That is your utility company must be one of the FirstEnergy companies (CEI, Toledo Edison, or Ohio Edison), one of the AEP companies, Duke Power, or Dayton Power & Light. If your utility company is a municipal or rural co-op utility you are not eligible for an Advanced Energy Fund grant.

Ohio Non-residential Solar Electric (PV) Grants (NOFA 08-09)
Grants are awarded based on system size. Systems must be at least 10 kW to qualify. Size is determined by adding up the STC watts rating for all the solar PV modules in the system. The grant provides $3.50 per watt. The maximum grant for Non- Residential PV systems is $150,000, but no more than 50% of system cost.

Ohio Non-residential Wind System Grants (NOFA 08-09)
Grants are awarded based on turbine output at the location and height that it is installed. Turbines must produce at least 3 kW AC at average site wind speed to qualify. The grant provides $2.00 per watt. The maximum grant for Non-residential wind systems is $200,000, but.no more that 40% of the system cost.

Ohio Non-residential Solar Thermal Grants (NOFA 08-09)
Grants are awarded based on system size. Systems must be at least 200 kBTU to qualify. Size is determined by adding up the SRCC 100 "clear day", category "C" BTU rating for all the solar thermal collectors in the system. The grant provides $30.00 per kBTU. The maximum grant for Non- Residential solar thermal systems is $150,000, but no more than 50% of system cost. .

Ohio Grants for Third-Party Ownership (NOFA 08-09)
Grants are also now available for Third-Party ownership of renewable systems. These grants support the purchase, ownership and operation of a renewable energy system by a financial entity, who then sells the clean energy produced back to the building owner or tenant via a Power Purchase Agreement (PPA). The formulas for calculating the grant amount are the same as above. However, the minimum system size to qualify is larger for each type of system. PV systems must be at least 50 kW. Wind systems must produce at least 50 kW AC at average site wind speed. Solar thermal systems must be at least 500 kBTU based on collector SRCC rating. The maximum grant for Non- Residential Third-Party Ownership systems is $200,000.

Give us a call to discuss your specific situation. Ohioans should also check the State of Ohio web site: Ohio Dept. of Development's Office of Energy Efficiency (ODOD, OEE) for details on the renewable energy grants that are available.

Click Economics of Solar & Wind Energy in Ohio (1.1 MB PDF file) to view or download a copy of Dovetail's presentation. It provides examples for several sizes of systems.

Ohio Grants for Residential Systems

The Ohio Dept. of Development, Energy Office once again provides Advanced Energy Fund grants for residential systems under NOFA #09-02, NOFA #09-03, and NOFA #09-04. The grants are available for home owners to install a renewable energy system on their primary residence. These NOFAs were announced in January 2009. These NOFAs replaced NOFA 07-03. There are grants available for Solar Electric (photovoltaic), Solar Thermal, and Wind systems. In order to qualify for a grant you must be in an Investor Owned Utility service area. That is your utility company must be one of the FirstEnergy companies (CEI, Toledo Edison, or Ohio Edison), one of the AEP companies, Duke Power, or Dayton Power & Light. If your utility company is a municipal or rural co-op utility you are not eligible for an Advanced Energy Fund grant.

Ohio Residential Solar Electric (PV) Grants (NOFA 09-04)
Grants are awarded based on system size. Systems must be at least 2 kW to qualify. Size is determined by adding up the STC watts rating for all the solar PV modules in the system. The grant provides $3.00 per watt. The maximum grant for Residential PV systems is $25,000, but no more than 50% of system cost.

Dovetail now has a Residential Solar Financing Program to enable homeowners to acquire a system with minimal up-front payment. See Residential Financing for details.

Ohio Residential Wind System Grants (NOFA 09-02)
Grants are awarded based on turbine output at the location and height that it is installed. Turbines must produce at least 3 kW AC at average site wind speed to qualify. The grant provides $2.00 per watt. The maximum grant for Residential wind systems can be no more that 50% of the system cost or more than $25,000.

Ohio Residential Solar Thermal Grants (NOFA 09-03)
These grants are only available for residential multi-family buildings and one-, two-, and three-family buildings in affordable and market rate developments that are heating potable and/or space heating water with electricity. Building projects must be in tranches of 10 dwelling units or more to qualify for funds. Grants are awarded based on system size. Size is determined by adding up the SRCC 100 "clear day", category "C" BTU rating for all the solar thermal collectors in the system. The grant provides $30.00 per kBTU for Market Rate Housing. The maximum grant for Market Rate Housing solar thermal systems is $8,000 per unit, and $75,000 per building, but no more than 50% of system cost. The grant provides $50.00 per kBTU for Affordable Housing. The maximum grant for Affordable Housing solar thermal systems is $10,000 per unit, and $100,000 per building, but no more than 50% of system cost. The grant for Affordable LEED / E-Star Housing solar thermal systems is 50% of the system cost.

Give us a call to discuss your specific situation. Ohioans should also check the State of Ohio web site: Ohio Dept. of Development's Office of Energy Efficiency (ODOD, OEE) for details on the renewable energy grants that are available.

Click Economics of Solar & Wind Energy in Ohio (1.1 MB PDF file) to view or download a copy of Dovetail's presentation. It provides examples for several sizes of systems.

New York Businesses & Residents
The New York State Energy Research and Development Authority (NYSERDA), through the New York State Energy $mart^SM program, is providing the following solar electric (PV) incentives.

Program incentives effective February 3, 2009, based on direct-current (DC) module ratings at standard test conditions, are as follows:

• Residential Incentives: $3.00/W up to 4 kW, $2.00/W for next 4 kW up to a maximum of 8 kW per site meter  
  
• Non-Residential Incentives: $3.00/W up to 40 kW, $2.00/W for next 40 kW up to a maximum of 80 kW per site meter  
  
• Schools, non-for-profit organizations, and municipalities: $5.00/W up to a maximum of 25 kW per site meter  
  
• Bonus incentive: $0.50/W for Energy Star Homes and building integrated PV (BIPV) systems

All customers will still be able to receive additional financial assistance through the Loan Fund. Under the NYSERDA program, cash incentives are only available for PV systems purchased through an eligible installer. All Incentives are subject to approval by NYSERDA. As an eligible installer, Matthew Bennett of Dovetail Solar & Wind is authorized to apply for incentives for approved systems for eligible customers. Eligible customers are those who pay into the New York State System Benefits Charge (SBC).

For more important information about this exciting program visit www.PowerNaturally.org, You can also call 1-866- 697-3732 and ask about NYSERDA’s small PV incentive program.

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

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