Rebates & Tax Incentives: Business Energy Investment Tax Credit (ITC)

This Federally-funded tax credit is administered by the U.S. Internal Revenue Service was created and enacted in 2008. The law extended the duration of existing solar energy, fuel cell, and microturbine credits by eight years, but was recently scheduled to continue to 2022. The credit has experienced periods of expansion and regression; it was recently amended by The Consolidated Appropriations Act of 2015, which extended the expiration date but introduced a scheduled and gradual step down in the value of the credit. However, the Bipartisan Budget Act of 2018 reinstated the tax credit for the remaining technologies that have historically been eligible.

This tax credit applies to eligible technologies: solar water heat, solar space heat, geothermal electric, solar thermal electric, solar thermal process heat, solar photovoltaics, wind, geothermal heat pumps, municipal solid waste, combined heat & power, fuel cells, tidal, geothermal direct-use, and microturbines. Applicable sectors include commercial, industrial, investor-owned utility, cooperative utilities, and agricultural projects. Rebate amounts are set to decrease slightly each year for the remainder of the credit’s life, but expiration dates are based on when construction begins. See below for the rebate amounts for 2021, when the tax credit is scheduled for revision.

 

  • PV, Solar Water Heating, Solar Space Heating/Cooling, and Solar Process Heat will receive 22% of the value of the investment tax credit.
  • Hybrid Solar Lighting, Fuel Cells, and Small Wind will receive 22% of the value of the investment tax credit.
  • Geothermal Heat Pumps, Microturbines, Combined Heat and Power Systems will receive 10% of the value of the investment tax credit.
  • Geothermal Electric technology will receive 10% of the value of the investment tax credit.

 

Maximum incentives for fuel cells are $1,500 per 0.5 kW, $200 per kW generated by microturbines, and $4,000 for small wind turbines placed in service between October and December of 2008. There is no limit for any other eligible technologies.

 

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