Renewable Energy Tax Incentives
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Massachusetts Tax Breaks:
Personal Tax Credit
Renewable Energy State Income Tax Credit
Personal Deduction
Alternative Energy and Energy Conservation Patent Exemption (Personal)
Property Tax Exemption
Renewable Energy Property Tax Exemption
Sales Tax Exemption
Renewable Energy Equipment Sales Tax Exemption
Corporate Deduction
Alternative Energy and Energy Conservation Patent Exemption (Corporate)
Excise Tax Deduction for Solar or Wind-Powered Systems
Corporate Exemption
Excise Tax Exemption for Solar or Wind Powered Systems
Corporate Tax Credit
Corporate Tax Credit for Solar Water Heating Systems
Industry Recruitment/Support
MTC – Business Expansion Initiative
MTC – Sustainable Energy Economic Development (SEED) Initiative
Production Incentive
Mass Energy – Renewable Energy Certificate Incentive
State Grant Program
MTC – Clean Energy Pre-Development Financing Initiative (Grants)
MTC – Large Onsite Renewables Initiative (LORI) Grants
MTC – Massachusetts Green Communities™ Grant
MTC – Matching Grants for Communities
State Loan Program
Boston Community Capital – Energy Advantage Program
MTC – Clean Energy Pre-Development Financing Initiative (Loans)
MTC – Massachusetts Green Communities™ Loan
State Rebate Program
MTC – Small Renewables Initiative Rebate
Complete list of incentives by Northeast state:
Federal Tax Incentives:
The Emergency Economic Stabilization Act of 2008: Energy Tax Incentives
Federal Tax Credits for Energy Efficiency***
***Small Wind Energy Systems
“Tax credits are available to homeowners who install residential small wind turbine systems. The credits are available for systems placed in service from January 1, 2008 to December 31, 2016. The tax credit is for 30% of the cost of the system, up to $500 for each half kilowatt of capacity with an overall maximum of $4,000.”
***Solar Energy Systems
“Tax credits are available for qualified solar water heating and photovoltaic systems. The credits are available for systems “placed in service” from January 1, 2006 through December 31, 2016. The tax credit is for 30% of the cost of the system, up to $2,000. After December 31, 2008, this $2,000 cap will be removed for photovoltaic systems (but not solar water heaters). This credit is completely separate from the $500 home improvement credit.”
United States (Federal) Incentives and Laws
Federal Tax Breaks for Businesses, Utilites, and Governments
Summary of the Credit for Qualifited Hybrid Vehicles
EXAMPLE RESIDENTIAL SOLAR INSTALLATION:
Reducing conventional electrical usage by 50% can be accomplished with solar collectors on a roof area of 350 square feet. The midrange cost of equipment and installation will be approximately $31,500 with several offsetting incentives:
Expected state rebate: $5,670
State tax credit/deduction: $1,000
Less income tax on state tax credit: ($280)
Federal tax credit: $2,000 (This cap will be lifted in 2009)
Estimated NET cost: $23,110
OK, not bad; but an increased property value and the area’s high electrical rates provide even greater incentives:
Increase in Property Value: $9,880 to $18,671
25-year Utility Savings: $20,729 to $39,173
Plus:
Greenhouse Gas (CO2) Saved over 25-year system life: 81.0 tons
CONSENSUS
Residents and businesses of Massachusetts and the rest of the Northeast states are burdened with the highest electrical rates in the country, the Cape Cod and islands especially. This has obviously provided an important reason to look for effective energy alternatives. Fortunately, solar power has received a good bit of legislative attention, and Massachusetts’ leadership is encouraged to keep it in focus as they move forward with the Green Communities Act of 2007 and The Emergency Economic Stabilization Act of 2008.
Wind energy installations also have many tax breaks, making the return on investment worthwile.
