Energy Incentives for Businesses - Temporary Increase in Credit for Alternative Fuel Vehicle Refueling Property: The new law modifies the credit rate and limit amounts for property placed in service in 2009 and 2010.
What
is the American Recovery & Reinvestment Act (ARRA) of 2009?
The American Recovery & Reinvestment Act (ARRA) of 2009 was
signed into law by President Obama on February 17, 2009. The bill is
intended to provide a stimulus to the U.S. Economy in the wake of the
economic downturn. The bill includes federal tax cuts, expansion of
unemployment benefits and other social provisions. Including
domestic spending in education, health care, and infrastructure,
including the energy sector.
Temporary
Increase in Credit for Alternative Fuel Vehicle Refueling Property:
The new law modifies the credit rate and limit amounts for property
placed in service in 2009 and 2010. Qualified property (other than
property relating to hydrogen) is now eligible for a 50 percent
credit, and the per-location limit increases to $50,000 for business
property (increases to $2,000 for other/residential locations).
Property relating to hydrogen keeps the 30 percent rate as before,
but the per-business location limit rises to $200,000.
Coordination
With Renewable Energy Grants: Business taxpayers also can apply
for a grant instead of claiming either the energy investment tax
credit or the renewable energy production tax credit for property
placed in service in 2009 or 2010. In some cases, if construction
begins in 2009 or 2010, the grant can be claimed for energy
investment credit property placed in service through 2016, and for
qualified renewable energy facilities, the grant is 30 percent of the
investment in the facility and the property must be placed in service
before 2014 (2013 for wind facilities).
Repeal
of Certain Limits on Business Credits for Renewable Energy Property:
The new law repeals the $4,000 limit on the 30% tax credit for small
wind energy property and the limitation on property financed by
subsidized energy financing. The repeal applies to property placed
in service after December 31, 2008.
Election
of Investment Credit in Lieu of Production Credit: Businesses
who place in service facilities that produce electricity from wind
and some other renewable resources after December 31, 2008 can choose
either the energy investment tax credit, which generally provides a
30% tax credit for investments in energy projects or the production
tax credit, which can provide a credit of up to 2.1 cents per
kilowatt-hour for electricity produced from renewable sources. A
business may not claim both credits for the same facility.
Extension
of Renewable Energy Products Tax Credit: The new law generally
extends the “eligibility dates” of a tax credit for facilities
producing electricity from win, closed-loop biomass, open-loop
biomass, geothermal energy, municipal solid waste, qualified
hydro-power and marine and hydrokinetic renewable energy. The new
law extends the “placed in service date” for wind facilities to
December 31, 2012. For the other facilities, the placed-in-service
date was extended from December 31, 2010 (December 31, 2011 in the
case of marine and hydrokinetic renewable energy facilities) to
December 31, 2013.
Qualified
Energy Conservation Bonds: The new law increases the amount of
funds available to issue qualified energy conservation bonds from the
one-time national limit of $800 million to $3.2 billion. These
qualified tax credit bonds can be issued to finance governmental
programs to reduce greenhouse gas emissions and other conservation
purposes.
New
Clean Renewable Energy Bonds: The new law increases the amount
of funds available to issue new clean renewable energy bonds from the
on-time national limit of $800 million to $2.4 billion. The
qualified tax credit bonds can be issued to finance certain types of
facilities that generate electricity from renewable sources (for
example, wind and solar).
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