|
Cleaner & Green Energy Incentives
| Incentives: Leveling the Playing Field
|
| Unfortunately, the prices of fossil fuels
and electricity do not account for "true costs."
Imagine if the price of a gallon of gasoline or heating oil reflected
military expenditures aimed at securing fuel supplies!
Imagine if the price of a kilowatt-hour covered the environmental
and social costs associated with air pollution, fish contamination,
water quality degradation, nuclear waste management, habitat destruction,
and climate change!
|
Many incentives are
available to encourage energy efficiency and promote renewable energy. They
make it easier for you, or your business, to save money and reduce your energy
footprint while taking advantage of proven and readily available technologies.
If energy prices
told the ecological truth, efficiency would be the rule rather than the
exception, and incentives would not be needed to make green energy technologies
more affordable (see box).
This page identifies
rebates, grants, tax credits, tax exemptions, and other incentives that
are available to Cape & Islands consumers, including residents, businesses,
and municipalities, through federal, state, and local governments and through
electricity and natural gas providers.
This page is
under development as of 02.15.06. It incorporates information on many but
not all incentives. If the information you need is not available below,
please click on the "Feedback" link at the top or bottom of this page and
send a specific request via email.
Hybrid,
Biodiesel & Other Vehicles
Space Heating & Efficiency
Water Heating & Efficiency
Lighting,
Appliance & Equipment Efficiency
Green Power
Solar Energy - Heat & Power
Wind
Power
Geothermal Energy - Space Conditioning
Bioenergy - Heat & Power
Disclaimer: The information
on this page presented for educational purposes only. Effort has been
made to ensure the accuracy of this information; however, it is subject
to change or correction. Before making any decisions, consult with
state and federal agencies, tax attorneys, accountants, or other experts
to determine whether purchases or installations of efficiency and renewable
technologies are eligible for specific incentives.
Hybrid, Biodiesel & Other Vehicles
Tax credits
are available to reduce the costs of purchasing cleaner vehicles, including
those that make each gallon of fossil fuel go further and those that use
alternative fuels.
The federal incentives
are very temporary - if you want to take advantage of them, you may need to
act quickly. (For information on choosing the most fuel-efficient vehicle
that meets your needs, visit the
Fuel
Economy Guide website.)
Federal Tax Incentives:
After January 1, 2006, individuals who and businesses that buy new hybrid
gas-electric and alternative-fuel vehicles are eligible for an income tax
credit ranging between $250 and $3400, depending on vehicle fuel economy
and weight. Purchases of advanced diesel vehicles and hybrid heavy-duty
trucks will also be eligible for this credit once these cleaner options
become available. For each vehicle manufacturer, this tax credit will begin
to be phased out once it has sold 60,000 eligible vehicles; after this threshold
is reached, the credit for that company's vehicles will be reduced by 50%
for a 6-month period and then another 50% (to 25% of the original level)
for another 6-month period.
State Tax Incentives:
From January 1, 2006 through 2010, individuals who purchase a gas-electric
hybrid or an alternative-fuel vehicle powered by ethanol, low-sulfur diesel,
compressed natural gas, liquefied natural gas, or hydrogen are eligible
for an income tax deduction of $2000. If a company has a fleet of more than
50 vehicles, it will be eligible for a tax credit if at least 10% of its
fleet is comprised of alternative-fuel vehicles. This credit is equivalent
to half the difference in price between the alternative-fuel vehicles and
their conventional gasoline counterparts.
Space Heating & Efficiency
Many incentives
exist for purchases of insulation, weatherstripping, programmable thermostats,
new windows, and other products that reduce heat losses and use energy wisely.
Incentives are also available for investments in more efficient heating
equipment, including conventional boilers and furnaces as well as solar
thermal and geothermal systems. (For information on energy-efficient products,
visit the
EnergyStar website.)
Local Incentive
Programs: Free energy audits, rebates, and other benefits are just a
phone call away for all types of consumers'and the financial incentives
available through utility efficiency programs are exempt from federal taxation.
Visit the websites of the organizations listed below to identify available
incentives and to sign up for an audit:
- Keyspan:
On the Cape, KeySpan offers services and incentives for heating efficiency
measures and fuel switching projects for all classes of consumers; click
here to visit
the company's website. KeySpan also has just announced a rebate program
for solar thermal installations for commercial, industrial, and multi-family
housing consumers; click
here for an overview
and call 781.466.5327 for more information.
- Cape Light
Compact: On the Cape and Vineyard, Cape Light Compact offers services
and incentives for heating efficiency measures and fuel switching projects.
Click on the links below for information on incentives available to
specific consumer classes:
- National
Grid: On Nantucket, National Grid offers services and incentives
for heating efficiency upgrades and fuel switching projects.
Click on the links
below for information on incentives available to specific consumer classes:
Federal, State & Local
Tax Incentives: Federal
and state legislation passed in 2005 created new, high-value tax incentives
for efficiency investments, but they expire soon. Many other incentives
have been on the books for a long time.
- State Personal
Income and Corporate Excise Tax Credit f or Residential Efficiency Measures:
Homeowners and members of condominium/cooperative associations who invest
in heating efficiency measures and systems before March 31,
2006, are eligible for a state tax credit of the lesser of either
30% of the net cost or $600 ($1000 for multifamily situations). The
purchase must be before the end of March, but the residential installation
may occur after. The credit may be applied during the 2005 or 2006 tax
year, regardless of the date of purchase.
- State Personal
Income Tax Credit for Residential Solar Thermal Installations: Massachusetts
provides a personal income tax credit for individuals who install solar
thermal systems in their residences. The system must be new, in compliance
with all applicable performance and safety standards, and expected to
remain in operation for at least 5 years. The credit is 15% of the net
expenditure (including installation) for the system, or $1,000, whichever
is less. The credit can be carried over for a period of 3 years if it
is greater than one's state income tax liability in individual years.
(M.G.L. c. 62, sec. 6(d))
- State Sales
Tax Exemption for Purchases of Solar Thermal and Geothermal Energy Systems
and Equipment for Residential Installations: Purchases of equipment
directly relating to solar thermal or geothermal systems are exempted
from the state sales tax if they are to be used as a primary or auxiliary
source of energy for heating or otherwise supplying the needs of a person's
principal residence in the state. (M.G.L. c. 64H, sec. 6(dd))
- Local Property
Tax Exemption for Residential, Commercial, and Industrial Installations
of Solar Thermal Systems: Solar thermal systems and devices installed
for supplying the energy needs of a residence or business are eligible
for an exemption from local property tax. This exemption, which is good
for 20 years from the date of system installation, applies only to the
value of the renewable energy equipment reflected on the property tax
bill, not the full amount of the bill. (M.G.L. c. 59, sec. 5, cl. 45)
- State Corporate Income
Tax Deduction for Purchases of Solar Thermal Systems and Equipment:
Businesses that purchase a solar energy system are allowed to deduct
from net income, for state tax purposes, any costs incurred from buying,
installing, and operating the unit, provided the installation is located
in Massachusetts and is used exclusively in the trade or business of
the corporation. The exemption is in effect for the length of the system's
depreciation period. (M.G.L. c. 63, sec. 38H(f))
- State Corporate Excise Tax Credit
for Purchases
of Solar Thermal Systems and Equipment: Businesses that purchase
a solar energy system for installation in a commercial building before March 31, 2006, may claim a tax credit of the lesser of either
15% of the purchase and installation cost or $300. Both building owners
and lessees are eligible for this credit.
The purchase must
be before the end of March, but the commercial installation may occur
after.
- State Corporate Excise
Tax Exemption for Purchases of Solar Thermal Systems and Equipment:
Businesses that purchase a solar energy system are allowed to deduct
from net income, for state excise tax purposes, any costs incurred from
buying, installing, and operating the unit, provided the installation
is located in Massachusetts and is used exclusively in the trade or
business of the corporation. The exemption is in effect for the length
of the system's depreciation period. (M.G.L. c. 63, sec. 38H)
- Federal Tax Credit
for Residential Efficiency Measures: Residential consumers who purchase
and install certain energy-efficient products in or on their principal
home between January 1, 2006 and December 31, 2007, are eligible
for a tax credit. This credit applies to windows, skylights, insulation,
exterior doors, roofs, and heating and cooling equipment. The maximum
credit varies by product.
- Federal Tax Credit
for Residential Solar Thermal Systems & Equipment:
Residential consumers who purchase and install solar thermal systems
for space heating are eligible for a tax credit of up to 30% of qualifying
expenditures, up to a maximum of $2000. Systems must be installed in
or on the taxpayer's principal residence between January 1, 2006
and December 31, 2007.
- Federal Energy Conservation
Tax Exemption for Homeowners and Owners of Multi-Family Housing:
Rebates from utilities (National Grid, Cape Light Compact, Keyspan)
to homeowners and owners of multi-family housing for installation of
"energy conservation measures" are exempt from federal taxation. Rebates
for installations of solar thermal systems also may qualify as 100%
exempt under this provision of the federal tax code.
- Federal Tax Credit
for Business Installations of Solar PV, Solar Thermal, and Other Advanced
Energy Systems: Businesses that install qualified fuel cells and
solar energy systems are eligible for a 30% tax credit against the purchase
price; installations of qualified microturbines are eligible for a 10%
credit against the purchase price. This credit is effective from January 1, 2006 to December 31, 2007.
- Federal Tax Deduction
for Builders/Owners of Energy-Efficient Commercial Buildings: New
commercial buildings that use 50% less energy, on an annual basis, relative
to the American Society of Heating, Refrigerating, and Air Conditioning
Engineers (ASHRAE) 2001 standard are eligible for a tax deduction equal
to the cost of the energy-efficient property installed during construction.
The maximum deduction is $1.80 per square foot; a deduction of $0.60
per square foot is provided for building subsystems.
Water Heating & Efficiency
Many incentives exist
for investments in efficiency measures and in new water heating equipment,
including solar thermal systems. In addition, tax credits and exemptions
are available at the federal, state, and local levels. (For information
on energy-efficient products, visit the
EnergyStar website.)
Local Incentive
Programs: Free energy audits, rebates, and other benefits are just a
phone call away for all types of consumers - and the financial incentives
available through utility efficiency programs are exempt from federal taxation.
Visit the websites of the organizations listed below to identify available
incentives and to sign up for an audit:
- Keyspan:
On the Cape, KeySpan offers services and incentives for water heating
efficiency measures and fuel switching projects for all classes of consumers;
click here
to visit the company's website. KeySpan also has just announced a rebate
program for solar thermal installations for commercial, industrial,
and multi-family housing consumers; click
here for an overview
and call 781.466.5327 for more information.
- Cape Light
Compact: On the Cape and Vineyard, Cape Light Compact offers services
and incentives for water heating efficiency measures and fuel switching
projects. Click on the links below for information on incentives available
to specific consumer classes:
- National
Grid: On Nantucket, National Grid offers services and incentives
for heating efficiency upgrades and fuel switching projects.
Click on the links
below for information on incentives available to specific consumer classes:
Federal, State
& Local Tax Incentives: Purchases of solar thermal water heating systems
offer a number of tax advantages.
- State Personal
Income Tax Credit for Residential Solar Thermal Installations: Massachusetts
provides a personal income tax credit for individuals who install solar
thermal systems in their residences. The system must be new, in compliance
with all applicable performance and safety standards, and expected to
remain in operation for at least 5 years. The credit is 15% of the net
expenditure (including installation) for the system, or $1,000, whichever
is less. The credit can be carried over for a period of 3 years if it
is greater than one's state income tax liability in individual years.
(M.G.L. c. 62, sec. 6(d))
- State Sales
Tax Exemption for Purchases of Solar Thermal Systems and Equipment for
Residential Installations: Purchases of equipment directly relating
to solar thermal systems are exempted from the state sales tax if they
are to be used as a primary or auxiliary source of energy for heating
or otherwise supplying the needs of a person's principal residence in
the state. (M.G.L. c. 64H, sec. 6(dd))
- Local Property
Tax Exemption for Residential, Commercial, and Industrial Installations
of Solar Thermal Systems: Solar thermal systems and devices installed
for supplying the energy needs of a residence or business are eligible
for an exemption from local property tax. This exemption, which is good
for 20 years from the date of system installation, applies only to the
value of the renewable energy equipment reflected on the property tax
bill, not the full amount of the bill. (M.G.L. c. 59, sec. 5, cl. 45)
- State Corporate Income
Tax Deduction for Purchases of Solar Thermal Systems and Equipment:
Businesses that purchase a solar energy system are allowed to deduct
from net income, for state tax purposes, any costs incurred from buying,
installing, and operating the unit, provided the installation is located
in Massachusetts and is used exclusively in the trade or business of
the corporation. The exemption is in effect for the length of the system's
depreciation period. (M.G.L. c. 63, sec. 38H(f))
- State Corporate Excise
Tax Exemption for Purchases of Solar Thermal Systems and Equipment:
Businesses that purchase a solar energy system are allowed to deduct
from net income, for state excise tax purposes, any costs incurred from
buying, installing, and operating the unit, provided the installation
is located in Massachusetts and is used exclusively in the trade or
business of the corporation. The exemption is in effect for the length
of the system's depreciation period. (M.G.L. c. 63, sec. 38H)
- Federal Tax Credit
for Solar Thermal Systems & Equipment:
Residential consumers who purchase and install solar thermal water heating
systems (for applications other than swimming pools and hot tubs) are
eligible for a tax credit of up to 30% of qualifying expenditures, up
to a maximum of $2000. Systems must be installed in or on the taxpayer's
principal residence between January 1, 2006 and December 31, 2007.
- Federal Energy Conservation
Tax Exemption for Homeowners and Owners of Multi-Family Housing:
Rebates from utilities (National Grid, Cape Light Compact, Keyspan)
to homeowners and owners of multi-family housing for installation of
"energy conservation measures" are exempt from federal taxation. Rebates
for installations of solar thermal systems also may qualify as 100%
exempt under this provision of the federal tax code.
- Federal Tax Credit
for Business Installations of Solar PV, Solar Thermal, and Other Advanced
Energy Systems: Businesses that install qualified fuel cells and
solar energy systems are eligible for a 30% tax credit against the purchase
price; installations of qualified microturbines are eligible for a 10%
credit against the purchase price. This credit is effective from January 1, 2006 to December 31, 2007.
- Federal Tax Deduction
for Builders/Owners of Energy-Efficient Commercial Buildings: New
commercial buildings that use 50% less energy, on an annual basis, relative
to the American Society of Heating, Refrigerating, and Air Conditioning
Engineers (ASHRAE) 2001 standard are eligible for a tax deduction equal
to the cost of the energy-efficient property installed during construction.
The maximum deduction is $1.80 per square foot; a deduction of $0.60
per square foot is provided for building subsystems.
Lighting, Appliance & Equipment Efficiency
Many
incentives exist for investments in technologies and systems that use electricity
and fuels more efficiently. In addition, tax credits and exemptions are
available at the federal, state, and local levels. (For information on buying
energy-efficient products, visit the
EnergyStar website.)
Local Incentive
Programs: Free energy audits, rebates, and other benefits are just a
phone call away for all types of consumers - and the financial incentives
available through utility efficiency programs are exempt from federal taxation.
Visit the websites of the organizations listed below to identify available
incentives and to sign up for an audit:
- On the Cape,
KeySpan offers services and incentives for energy-efficient purchases
and fuel switching projects. Click
here to visit
the company's website.
- On the Cape
and Vineyard, Cape Light Compact offers services and incentives for
energy-efficient purchases and fuel switching projects. Click on the
links below for information on incentives available to specific consumer
classes:
- On Nantucket,
National Grid offers services and incentives for energy-efficient purchases
and fuel switching projects.
Click on the links
below for information on incentives available to specific consumer classes:
Tax Incentives:
- Federal Energy Conservation
Tax Exemption for Homeowners and Owners of Multi-Family Housing.
Rebates from utilities (National Grid, Cape Light Compact, Keyspan)
to homeowners and owners of multi-family housing for installation of
"energy conservation measures" are exempt from federal taxation.
Green Power
Consumers
who buy "boutique green" products offered in conjunction with the Massachusetts
Technology Collaborative
Clean
Energy Choice program can write off a portion of their purchases as
a charitable contribution if they itemize deductions on their tax returns.
Green products available through the Cape Light Compact and National Grid's
GreenUp Program offer this advantage. For more information on locally available
green power products, visit the Tips for Choosing
a Power Supplier page.
Solar Energy - Heat & Power
Grants and rebates
are available for small- and large-scale solar photovoltaic (PV) systems,
which generate electricity. Owners of PV arrays can also take advantage
of state renewable energy production incentives. Rebates are available for
solar thermal systems installed for space heating or water heating in commercial,
industrial, and multi-family applications. A variety of tax incentives are
designed to encourage installation of both types of solar energy options.
Solar PV Rebates,
Grants & Support Programs: The Massachusetts Technology Collaborative
(MTC) administers ratepayer-funded incentive programs for systems of varying
sizes.
- State Rebates for
Residential & Other Small Solar PV Projects (Under 10 kW). The MTC's
Small Renewables Initiative offers rebates for both residential
and non-residential installations of grid-connected PV systems on existing,
renovated, and expanding buildings as well as new construction. Rebates
are available to homeowners, schools, and communities, as well as to
commercial, industrial, and institutional consumers. The capacity of
residential projects is capped at below 3.5 kW and other projects at
below 10 kW. To be eligible, facility owners must be pre-approved for
a rebate before installation, and more than 90% of the system's power
must be used to meet on-site needs. Rebates are awarded to owners without
affecting their ability to sell RECs to suppliers, brokers, or the MTC.
As of 02.01.06, the base incentive for PV installations is $2.50/W;
additional incentives, totaling from $0.50 to $2.50/W, may be awarded
if projects
- Employ systems or components made in Massachusetts,
particularly building-integrated PV technology.
- Are deployed on
public buildings, in low-income and affordable housing projects, as
backup power systems for critical loads, or in economic target areas.
- Are integrated within new, high-performance construction projects
and green buildings.
- State Grants for Large
Solar PV Projects (Greater Than 10 kW). The MTC's
Large Onsite Renewables Initiative (LORI) offers grants for multi-family
residential, commercial, industrial, school, institutional, and community
installations of grid-connected PV, wind, fuel cell, hydro, and bioenergy
systems. Rated capacity must be more than 10 kW. More than 50% of the
system's power must be used to meet on-site needs. Base incentives range
from $1.50 to $4.00/W, depending on technology and application, with
a maximum grant of $40,000 for project feasibility studies, $75,000
for design and engineering, and $500,000 for construction. Additional
incentives, like the ones offered by MTC for smaller installations,
may be awarded based on project-specific characteristics. Grants are
awarded to owners without affecting their ability to sell RECs to suppliers,
brokers, or the MTC.
- State Financing Support
for Large Projects: Owners and developers of larger-scale clean
energy facilities may be able to take advantage of another MTC program,
which provides risk-hedging contracts to developers and to companies
that purchase RECs from eligible facilities. This program encourages
generators and brokers to enter into long-term contracts for RECs - either
directly with MTC or with other market participants - in order to create
a guaranteed revenue stream and improve prospects for project financing.
Visit MTC's website
for additional information.
Solar PV Production Incentives:
Residents, businesses, organizations, and communities installing solar PV
systems can reap financial rewards under the state's Renewable Portfolio
Standard (RPS). Under the RPS, each kilowatt-hour of electricity generated
by a renewable energy system also generates a REC, which can be sold to
the MTC, power suppliers, or green power brokers. (Mass Energy is currently
purchasing RECs from solar PV systems at a rate of $0.06/kWh.)
Solar Thermal Rebates:
KeySpan has just announced
a rebate program for solar thermal installations for commercial, industrial,
and multi-family housing consumers.
- Keyspan:
On the Cape, Keyspan offers services and incentives for solar thermal
applications - except on single-family residences. Click
here for an overview
and call 781.466.5327 for more information.
Federal, State
& Local Tax Incentives: Purchases of solar PV and solar thermal systems
offer a number of tax advantages.
- State Personal
Income Tax Credit for Residential Solar Installations. Massachusetts
provides a personal income tax credit for individuals who install solar
PV and/or solar thermal systems in their residences. The system must
be new, in compliance with all applicable performance and safety standards,
and expected to remain in operation for at least 5 years. The credit
is 15% of the net expenditure (including installation) for the system,
or $1,000, whichever is less. The credit can be carried over for a period
of 3 years if it is greater than one's state income tax liability in
individual years. (M.G.L. c. 62, sec. 6(d))
- State Sales Tax Exemption
for Purchases of Solar Energy Systems and Equipment for Residential
Installations. Purchases of equipment directly relating to PV and
solar thermal systems are exempted from the state sales tax if they
are to be used as a primary or auxiliary source of energy for heating
or otherwise supplying the needs of a person's principal residence in
the state. (M.G.L. c. 64H, sec. 6(dd))
- Local Property
Tax Exemption for Residential, Commercial, and Industrial Installations
of Solar Energy Systems. Solar PV and solar thermal systems and
devices installed for supplying the energy needs of a residence or business
are eligible for an exemption from local property tax. This exemption,
which is good for 20 years from the date of system installation, applies
only to the value of the renewable energy equipment reflected on the
property tax bill, not the full amount of the bill. (M.G.L. c. 59, sec.
5, cl. 45)
- State Corporate Income
Tax Deduction for Purchases of Solar Energy Systems and Equipment.
Businesses that purchase a solar energy system are allowed to deduct
from net income, for state tax purposes, any costs incurred from buying,
installing, and operating the unit, provided the installation is located
in Massachusetts and is used exclusively in the trade or business of
the corporation. The exemption is in effect for the length of the system's
depreciation period. (M.G.L. c. 63, sec. 38H(f))
- State Corporate Excise
Tax Exemption for Purchases of Solar Energy Systems and Equipment.
Businesses that purchase a solar energy system are allowed to deduct
from net income, for state excise tax purposes, any costs incurred from
buying, installing, and operating the unit, provided the installation
is located in Massachusetts and is used exclusively in the trade or
business of the corporation. The exemption is in effect for the length
of the system's depreciation period. (M.G.L. c. 63, sec. 38H)
- Federal Tax Credit
for Solar Energy Systems & Equipment.
Residential consumers who purchase and install solar PV and solar thermal
heating systems (for applications other than swimming pools and hot
tubs) are eligible for a tax credit of up to 30% of qualifying expenditures,
up to a maximum of $2000. Systems must be installed in or on the taxpayer's
principal residence between January 1, 2006 and December 31, 2007.
Wind Energy
Grants, rebates, production, and tax
incentives are available for small- and large-scale wind energy projects.
Wind Rebates,
Grants & Support Programs: The Massachusetts Technology Collaborative
(MTC) administers ratepayer-funded incentive programs for systems of varying
sizes.
- State Rebates for
Residential & Other Small Wind Projects (Under 10 kW): The MTC's
Small Renewables Initiative offers rebates for both residential
and non-residential installations of grid-connected wind turbines on
existing, renovated, and expanding buildings as well as new construction.
Rebates are available to homeowners, schools, and communities, as well
as to commercial, industrial, and institutional consumers. The capacity
of all projects is capped at below 10 kW. To be eligible, facility owners
must be pre-approved for a rebate before installation, and more than
90% of the system's power must be used to meet on-site needs. Rebates
are awarded to owners without affecting their ability to sell RECs to
suppliers, brokers, or the MTC. As of 02.01.06, the base incentive for
wind installations is $2.75/W; additional incentives, totaling from
$0.10 to $2.50/W, may be awarded if projects
- Employ systems or
components made in Massachusetts.
- Are deployed on public buildings,
in low-income and affordable housing projects, as backup power systems
for critical loads, or in economic target areas.
- Are integrated
within new, high-performance construction projects and green buildings.
- State Grants for Large
Wind Projects (Greater Than 10 kW): The MTC's
Large Onsite Renewables Initiative (LORI) offers grants for multi-family
residential, commercial, industrial, school, institutional, and community
installations of grid-connected wind systems. Rated capacity must be
more than 10 kW. More than 50% of the system's power must be used to
meet on-site needs. Base incentives range from $1.50 to $4.00/W, depending
on technology and application, with a maximum grant of $40,000 for project
feasibility studies, $75,000 for design and engineering, and $500,000
for construction. Additional incentives, like the ones offered by MTC
for smaller installations, may be awarded based on project-specific
characteristics. Grants are awarded to owners without affecting their
ability to sell RECs to suppliers, brokers, or the MTC.
- State Grants for Municipal
Wind Projects: The MTC's
Community Wind Initiative gives towns and cities the opportunity
to secure large grants for pursuing land-based wind energy projects.
It offers technical and business services, wind monitoring equipment,
construction grants, and other provisions to help interested communities
in systematically exploring wind resources and in developing wind energy
projects. Numerous Cape & Islands communities are already taking advantage
of this program, as described on this website's
Community Wind page. Grants are awarded
to owners without affecting their ability to sell RECs to suppliers,
brokers, or the MTC.
- State Financing Support
for Large Projects: Owners and developers of larger-scale clean
energy facilities may be able to take advantage of another MTC program,
which provides risk-hedging contracts to developers and to companies
that purchase RECs from eligible facilities. This program encourages
generators and brokers to enter into long-term contracts for RECs - either
directly with MTC or with other market participants - in order to create
a guaranteed revenue stream and improve prospects for project financing.
Visit MTC's website
for additional information.
Wind Energy Production
Incentives: Both state and federal policies create production
incentives for wind generation.
- State: Residents,
businesses, organizations, and communities installing a wind energy
system can reap financial rewards from the Massachusetts Renewable Portfolio
Standard (RPS). Under the RPS, each kilowatt-hour of electricity generated
by a renewable energy system also generates a REC, which can be sold
to the MTC, power suppliers, or green power brokers.
Federal, State
& Local Tax Incentives: Installations of wind energy systems offer a
number of tax advantages.
- State Personal
Income Tax Credit for Residential Wind Installations: Massachusetts
provides a personal income tax credit for individuals who install wind
energy systems in their residences. The system must be new, in compliance
with all applicable performance and safety standards, and expected to
remain in operation for at least 5 years. The credit is 15% of the net
expenditure (including installation) for the system, or $1,000, whichever
is less. The credit can be carried over for a period of 3 years if it
is greater than one's state income tax liability in individual years.
(M.G.L. c. 62, sec. 6(d))
- State Sales Tax Exemption
for Purchases of Wind Energy Systems and Equipment for Residential Installations:
Purchases of equipment directly relating to wind systems are exempted
from the state sales tax if they are to be used as a primary or auxiliary
source of energy for heating or otherwise supplying the needs of a person's
principal residence in the state. (M.G.L. c. 64H, sec. 6(dd))
- Local Property Tax
Exemption for Residential, Commercial, and Industrial Installations
of Wind Energy Systems: Wind energy systems and devices installed
for supplying the energy needs of a residence or business are eligible
for an exemption from local property tax. This exemption, which is good
for 20 years from the date of system installation, applies only to the
value of the renewable energy equipment reflected on the property tax
bill, not the full amount of the bill. (M.G.L. c. 59, sec. 5, cl. 45)
- State Corporate Income
Tax Deduction for Purchases of Wind Energy Systems and Equipment:
Businesses that purchase a wind energy system are allowed to deduct
from net income, for state tax purposes, any costs incurred from buying,
installing, and operating the unit, provided the installation is located
in Massachusetts and is used exclusively in the trade or business of
the corporation. The exemption is in effect for the length of the system's
depreciation period. (M.G.L. c. 63, sec. 38H(f))
- State Corporate Excise
Tax Exemption for Purchases of Wind Energy Systems and Equipment:
Businesses that purchase a wind energy system are allowed to deduct
from net income, for state excise tax purposes, any costs incurred from
buying, installing, and operating the unit, provided the installation
is located in Massachusetts and is used exclusively in the trade or
business of the corporation. The exemption is in effect for the length
of the system's depreciation period. (M.G.L. c. 63, sec. 38H)
Geothermal Energy - Space Conditioning
Federal: tax credits for
installations
State Sales Tax Exemption
for Purchases of Geothermal Energy Systems and Equipment for Residential
Installations
Purchases of equipment directly relating to geothermal
systems are exempted from the state sales tax if they are to be used
as a primary or auxiliary source of energy for heating or otherwise
supplying the needs of a person's principal residence in the state.
(M.G.L. c. 64H, sec. 6(dd))
Bioenergy - Heat & Power
Federal: tax credits for installations
State Grants for Large
Bioenergy Projects (Greater Than 10 kW)
The MTC's
Large Onsite Renewables Initiative (LORI) offers grants for multi-family
residential, commercial, industrial, school, institutional, and community
installations of grid-connected bioenergy systems. Eligible bioenergy
fuels include landfill gas, biodiesel, wood, agricultural and food wastes,
energy crops, biogas, and refuse-derived organic materials. Rated capacity
must be more than 10 kW. More than 50% of the system's power must be
used to meet on-site needs. Base incentives range from $1.50 to $4.00/W,
depending on technology and application, with a maximum grant of $40,000
for project feasibility studies, $75,000 for design and engineering,
and $500,000 for construction. Additional incentives, like the ones
offered by MTC for smaller installations, may be awarded based on project-specific
characteristics. Grants are awarded to owners without affecting their
ability to sell RECs to suppliers, brokers, or the MTC.
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