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:

• Safe, clean, reliable energy that provides piece of mind
• Protecting and improving the planet for future generations by reducing the production of green house gases and air pollutants
• Demonstration of responsible corporate stewardship and community responsibility to sustainable practices
• Creation of new jobs in a viable and emerging technology
• Locking in a fixed cost for some of your energy needs, which reduces the impact of rising energy prices
• Power source for the next 5 billion years
• Green marketing and PR value

Actual Cost Savings and Grants

• Federal Tax Credits and Accelerated Depreciation
• Net Metering
• Grants from the Ohio Department of Development (ODOD) Energy Office
• Grants from the USDA
• Energy Efficiency Revolving Loan Fund
• Ohio Air Quality Development Authority
• Peak Demand Shaving for Time-of-Day metering

Return on Investment

As the efficiency of renewable energy systems improve and the costs decline, they are becoming an increasing attractive investment capable of saving significant money. Most systems last at least 25 years, often much longer, so 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 is about getting closer to the 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 50% of a residential system’s cost. For commercial and farm systems, the offset can be much larger due to the Federal tax incentives. This can be as much as 90% of the system cost see the below presentation for details and examples of each type of system.

INCENTIVES: Database of State Incentives for Renewable Energy (DSIRE) This web site provides information for every state in the United States of America.

GRANTS: USDA Rural Development for Renewable Energy

RECS: Renewable Energy Certificates (RECs) - Renewable energy certificates (RECs), also known as green certificates, green tags, or tradable renewable certificates, represent the environmental attributes of the power produced from renewable energy projects and are sold separate from commodity electricity.

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. It is not available for Wind systems. The 30% credit 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 will need pay Federal income tax on the state grant. The system must be installed by December 31, 2008. There is a $2,000 maximum cap for Residential systems. There is no Cap or maximum Tax Credit for Commercial!

Federal Modified Accelerated Cost Recovery System (MACRS)
Businesses can also take advantage of a 5 year Accelerated Depreciation Schedule for both Solar and Wind systems.

The Solar Energy Industries Association (SEIA) has produced a very useful guide on use of the Federal tax incentives. You can obtain a copy of this guide by clicking here.

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

Ohio Businesses & Residents

Ohio Revised Code Section 5709.46 exempts commercial solar and wind systems from Property taxation, Sales Tax, Use Tax, and Ohio franchise tax. Ohio provides businesses a depreciation schedule of 5 or 10 years for renewable energy systems.

Ohio Renewable Energy Grants

Note: As of March 13, 2008, Ohio has suspended all new grants for residential renewable energy systems. Grants are still available for businesses, schools, institutions, farms, local government entities, and other non-residential systems. Residential grants may resume later this summer.

The Ohio Dept. of Development, Energy Office provides Advanced Energy Fund grants for non-residential systems under NOFA #08-09 announced May 1, 2008. 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 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.

Ohio Non-residential Wind System Grants (NOFA 08-09)
Grants are awarded based on turbine size. Turbines must produce at least 10 kW AC at average site wind speed to qualify.. The grant provides $2.50 per watt. The maximum grant for Non- Residential wind systems is $150,000.

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 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.

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.

New York Businesses & Residents

NYSERDA Cash Incentives for Small Solar Electric or Photovoltaic Systems

The New York State Energy Research and Development Authority (NYSERDA), through the New York State Energy $mart^SM program, is providing the following incentives effective March 1, 2007:

Residential

• $4.00 per watt up to 5,000 watts or 5 kW,
• $4.50 per watt Energy Star up to 5,000 watts or 5 kW
• $4.50 per watt Building Integrated PV up to 5,000 watts or 5 kW.
• For additional kilowatts above 5 kW, all residential incentives will be reduced by $1.00 and all residential incentives will be capped at 10 kW.

Non-residential

• $4.00 per watt up to 25 kW,
• $4.50 per watt BIPV,
• $5.00 per watt for schools, non for profits, and municipalities.
• All non-residential incentives will be reduced by $1.00 per watt for additional kWs above 25 kW and non-residential incentives will be capped at 50 kW per site/meter and 100 kW per customer.
• Exemptions related to systems per customer may be considered on a case-by-case basis.

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.

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