Renewable Energy Incentives

Getting Started
Join the thousand of home and business owners who have earned cash back by installing renewable energy!

Investment Tax Credit (ITC)
Home and business owners who install an eligible renewable energy system on or before December 31, 2013 may take an income tax credit worth up to 30 percent of the installed cost.
The credit is equal to 30% of expenditures, with no maximum. Generally, if incentives are reported as taxable income they do not reduce the tax basis for calculating the 30% tax credit for the equipment whose purchase price is paid in part with the grant, such as commercial rebates or grants from the state or local governments.
If there is not enough tax liability to claim the full credit immediately, unused commercial credits can be carried forward for up to 20 years.
Click here for more information. (DSIRE - Database of Incentives for Renewables & Efficiency)
Click here for more information. (Energy Star)
IRS Form 3468

Treasury Grant
Eligible taxpayers may take the Investment Tax Credit (ITC) mentioned above or the Treasury Grant. Treasury Grants are available to eligible property placed in service in 2009, 2010 or 2011. For Solar and Wind systems the grant is equal to 30% of the basis of the property.
Click here for more information. (DSIRE - Database of Incentives for Renewables & Efficiency)

Property Tax Exemption
Renewable Energy Systems that generate energy using solar and wind are exempt from property tax. Every year that a qualifying system functions, the entire renewable energy system and affiliated equipment will be exempt.
Click here for more information. (DSIRE - Database of Incentives for Renewables & Efficiency)
IRS Form 18865

SREC (Solar Renewable Energy Certificates)
The Renewable Portfolio Standard requires electricity suppliers to secure a portion of their electricity from solar generators. The SREC program provides a means for Solar Renewable Energy Certificates to be created for every megawatt-hour of solar electricity created.
1 SREC = 1,000 kWh of solar electricity - 1MWh of solar electricity
The SREC is sold separately from the electricity and represents the "solar" aspect of the electricity that was produced. The value of an SREC is determined by the market subject to supply and demand constraints.
Most suppliers will either issue cumbersome requests for proposals or work directly with third-party aggregators and brokers.
Click here for more information. (SREC Trade)

MACRS (Modified Accelerated Cost-Recovery System)
Home and Business owners may recover investments in certain property through depreciation deductions. The MACRS establishes a set of class lives for various types of property, ranging from three to fifty years, over which the property may be depreciated. A number of renewable energy technologies are classified as five-year property under MACRS.
Only the declining balance method and straight line method of computing depreciation are allowed under MACRS. Taxpayers using the decling balance change to the straight line method at the point at which depreciation deductions are optimized. The 5-year class uses 200% decling balance depreciation and converts to straight-line depreciation in year 4.
Bonus Depreciation (2008-2012) Eligible property has an allowed first year deduction of 100% of the adjusted basis.
Click here for more information. (DSIRE - Database of Incentives for Renewables & Efficiency)
IRS form 4562

*The information presented on Home Energy's website provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance.