Federal Incentives

Business Energy Investment Tax Credit (ITC)

Incentive Type: Corporate Federal Tax Credit

Eligible Renewable/Other Technologies: Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics, Wind, Biomass, Geothermal Electric, Fuel Cells, Geothermal Heat Pumps, CHP/Cogeneration, Solar Hybrid Lighting, Direct Use Geothermal, Microturbines

Applicable Sectors: Commercial, Industrial, Utility

Amount: 30% for solar, fuel cells and small wind; 10% for geothermal, microturbines and CHP

Maximum Incentive:
Fuel cells: $1,500 per 0.5 kW 
Microturbines: $200 per kW
Small wind turbines placed in service 10/4/08 to 12/31/08: $4,000
Small wind turbines placed in service after 12/31/08: no limit

Eligible System Size: Small wind turbines: 100 kW or less; Fuel cells: 0.5 kW or greater; Microturbines: 2 MW or less; CHP: 50 MW or less

Equipment/Installation Requirements: Fuel cells, microturbines and CHP systems must meet specific energy-efficiency criteria

Authority 1: 26 USC § 48

Authority 2: H.R. 1424: Div. B (The Energy Improvement and Extension Act of 2008)
Date Enacted: 10/3/2008
Effective Date: 10/3/2008

Authority 3: H.R. 1: Div. B, Sec. 1103 (The American Recovery and Reinvestment Act of 2009)
Date Enacted: 2/17/2009
Effective Date: 1/1/2009

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Clean Renewable Energy Bonds (CREBs)

Incentive Type: Federal Loan Program

Eligible Renewable/Other Technologies: Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Municipal Solid Waste, Hydrokinetic Power, Anaerobic Digestion, Tidal Energy, Wave Energy, Ocean Thermal

Applicable Sectors: Local Government, State Government, Tribal Government, Municipal Utility, Rural Electric Cooperative

Amount: Varies

Authority 1: 26 USC § 54
Effective Date: 08/08/2005
Expiration Date: 12/31/2009 

Authority 2: H.R. 1424: Div. B (The Energy Improvement and Extension Act of 2008)
Date Enacted: 10/3/2008
Effective Date: 10/3/2008

Authority 3: H.R. 1: Div. B, Sec. 1111 (The American Recovery and Reinvestment Act of 2009)
Date Enacted: 2/17/2009
Effective Date: 2/17/2009

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Renewable Electricity Production Tax Credit (PTC)

Incentive Type: Corporate Federal Tax Credit
Note: The American Recovery and Reinvestment Act of 2009 (H.R. 1) allows taxpayers eligible for the federal renewable electricity production tax credit (PTC) to take the federal business energy investment tax credit (ITC) or to receive a grant from the U.S. Treasury Department instead of taking the PTC for new installations. The new law also allows taxpayers eligible for the ITC to receive a grant from the U.S. Treasury Department instead of taking the ITC for new installations.

Eligible Renewable/Other Technologies: Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Municipal Solid Waste, Hydrokinetic Power (i.e., Flowing Water), Anaerobic Digestion, Small Hydroelectric, Tidal Energy, Wave Energy, Ocean Thermal

Applicable Sectors: Commercial, Industrial

Amount: 2.1¢/kWh for wind, geothermal, closed-loop biomass; 1.0¢/kWh for other eligible technologies. Generally applies to first 10 years of operation.

Eligible System Size: Marine and Hydrokinetic: Minimum capacity of 150 kW 
Agricultural Livestock Waste: Minimum capacity of 150 kW

Authority 1: 26 USC § 45
Date Enacted: 1992  

Authority 2: H.R. 1424: Div. B, Sec. 101 & 102 (The Energy Improvement and Extension Act of 2008)
Date Enacted: 10/03/2008
Effective Date: Varies 

Authority 3: H.R. 1: Div. B, Sec. 1101 & 1102 (The American Recovery and Reinvestment Act of 2009)
Date Enacted: 02/17/2009
Effective Date: 01/01/2009
Expiration Date: Varies

Website: http://www.irs.gov/pub/irs-pdf/f8835.pdf   

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Residential Renewable Energy Tax Credit

Incentive Type: Personal Federal Tax Credit

Eligible Renewable/Other Technologies: Solar Water Heat, Photovoltaics, Wind, Fuel Cells, Geothermal Heat Pumps, Other Solar Electric Technologies

Applicable Sectors: Residential

Amount: 30%

Maximum Incentive:
Solar electric systems placed in service before 1/1/09: $2,000 
Solar electric systems placed in service after 12/31/08: no maximum 
Solar water heaters placed in service before 1/1/09: $2,000
Solar water heaters placed in service after 12/31/08: no maximum
Wind turbines placed in service in 2008: $4,000
Wind turbines placed in service after 12/31/08: no maximum
Geothermal heat pumps placed in service in 2008: $2,000
Geothermal heat pumps placed in service after 12/31/08: no maximum
Fuel cells: $500 per 0.5 kW

Carryover Provisions: Excess credit may be carried forward to succeeding tax year.  

Eligible System Size: Fuel cells: 0.5 kW minimum

Equipment/Installation Requirements: Solar water heating property must be certified by SRCC or by comparable entity endorsed by the state in which the system is installed. At least half the energy used to heat the dwelling's water must be from solar.Geothermal heat pumps must meet the requirements of the Energy Star program.Fuel cells must have an electricity-only generation efficiency greater than 30%.

Authority 1: 26 USC § 25D
Date Enacted: 8/8/2005 (amended 2006, 2008)
Effective Date: 1/1/2006
Expiration Date: 12/31/2016

Authority 2: H.R. 1424: Div. B, Sec. 106 (The Energy Improvement and Extension Act of 2008)
Date Enacted: 10/3/2008
Effective Date: 1/1/2008; elimination of the solar-electric credit cap effective 1/1/2009
Expiration Date: 12/31/2016

Authority 3: H.R. 1: Div. B, Sec. 1122 (The American Recovery and Reinvestment Act of 2009)
Date Enacted: 2/17/2009
Effective Date: 1/1/2009

Authority 4: IRS Form 5695 & Instructions: Residential Energy Credits

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USDA Rural Energy for America Program (REAP) - Grants

Incentive Type: Federal Grant Program

Eligible Efficiency Technologies: Yes; specific technologies not identified

Eligible Renewable/Other Technologies: Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Photovoltaics, Wind, Biomass, Hydroelectric, Renewable Transportation Fuels, Geothermal Electric, Geothermal Heat Pumps, CHP/Cogeneration, Hydrogen, Direct-Use Geothermal, Anaerobic Digestion, Small Hydroelectric, Tidal Energy, Wave Energy, Ocean Thermal, Renewable Fuels, Fuel Cells using Renewable Fuels, Microturbines

Applicable Sectors: Commercial, Schools, Local Government, State Government, Tribal Government, Rural Electric Cooperative, Agricultural, Public Power Entities  

Amount: Varies

Max. Limit: 25% of project cost

Authority 1: 7 USC § 8106
Date Enacted: 5/13/2002
Effective Date: FY 2003

Authority 2: Food, Conservation, and Energy Act of 2008 (H.R. 2419)
Date Enacted: 5/22/2008

Website: http://www.usda.gov/farmbill or
               See in DSIRE

Contact:  Laura Tucker
               Energy Manager
               USDA-Rural Development – Arkansas
               501-301-3284
               Laura.tucker@ar.usda.gov

USDA Rural Energy for America Program (REAP) - Loan Guarantees

Incentive Type: Federal Loan Program

Eligible Efficiency Technologies: Yes; specific technologies not identified

Eligible Renewable/Other Technologies: Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Photovoltaics, Wind, Biomass, Hydroelectric, Renewable Transportation Fuels, Geothermal Electric, Geothermal Heat Pumps, CHP/Cogeneration, Hydrogen, Direct-Use Geothermal, Anaerobic Digestion, Small Hydroelectric, Tidal Energy, Wave Energy, Ocean Thermal, Renewable Fuels, Fuel Cells using Renewable Fuels, Microturbines

Applicable Sectors: Commercial, Agricultural

Amount: Varies Max. Limit: $25 million per loan guarantee

Authority 1: 7 USC § 8106
Date Enacted: 5/13/2002
Effective Date: FY 2003

Authority 2: Food, Conservation, and Energy Act of 2008 (H.R. 2419)
Date Enacted: 5/22/2008

Website: http://www.usda.gov/farmbill or
               See in DSIRE

Contact:  Laura Tucker
               Energy Manager
               USDA-Rural Development – Arkansas
               501-301-3284
               Laura.tucker@ar.usda.gov