Energy Provisions of the American Recovery and Reinvestment Act of 2009 Herb Stevens

Residential Energy Efficiency Credit increases the energy tax credit for homeowners who make energy efficient improvements increases the credit rate to 30 percent of the cost of all qualifying improvements raises the maximum credit limit to $1,500 for improvements placed in service in 2009 and 2010

Residential Energy Efficiency Credit cont’d Energy-efficient improvements include: –adding insulation –exterior windows –heating –air conditioning systems

Residential Alternative Energy Credit nonrefundable energy tax credit help individual taxpayers pay for qualified residential alternative energy equipment –solar electric –solar hot water heaters –geothermal heat pumps –wind turbines credit equal to 30 percent of the cost of qualified property

Plug-in Electric Vehicle Credit vehicles must be newly purchased draw propulsion using a battery –at least four kilowatt hours –recharged from an external source of electricity minimum amount of the credit is $2,500 and the credit tops out at $7,500 –depends on the battery capacity credit reduced after the vehicle manufacturer has sold 200,000 vehicles

Plug-in Electric Vehicle Credit cont’d special tax credit for two types of plug-in vehicles –certain low-speed electric vehicles –two- or three-wheeled vehicles credit is 10% of the cost of the vehicle, up to a maximum credit of $2,500 for purchases made before Jan. 1, 2012

Extension of Renewable Energy Production Tax Credit extends eligibility date to end of 2012 for facilities producing electricity from wind extends eligibility date to end of 2013 for –biomass –geothermal energy –municipal solid waste –qualified hydropower –marine and hydrokinetic energy compare with solar to end of 2016

Election of Investment Credit in Lieu of Production Credit For facilities that produce electricity from wind and some other renewable resources –owner may elect energy investment tax credit; or –production tax credit *May not claim both credits for the same facility

Coordination With Renewable Energy Grants Owner of property can apply for a grant if construction begins in 2009 or 2010, the grant can be claimed for energy investment credit property placed in service through 2016 for qualified renewable energy facilities, the grant is 30% of the investment in the facility

Repeal of Certain Limits on Business Credits for Renewable Energy Property repeals the $4,000 limit on the 30 percent tax credit for small wind energy property repeals limitation on property financed by subsidized energy financing

Bonus Depreciation Extended One Year Energy property is depreciated over 5 years For 2009 only, 50% of cost is depreciated in first year

New Clean Renewable Energy Bonds increases the amount of funds available to issue new clean renewable energy bonds qualified tax credit bonds can be issued to finance certain types of facilities that generate electricity from renewable sources For borrower - bonds are effectively at less than 1% interest

Qualified Energy Conservation Bonds increases the amount of funds available to issue qualified energy conservation bonds qualified tax credit bonds can be issued to finance governmental programs to reduce greenhouse gas emissions and other conservation purposes

DOE Loan Guarantee Program Additional funding to existing program - $6 billion DOE loan guarantee capped at 80% of project cost Supports new or improved technologies in –renewable energy –fuel cells –advanced nuclear energy –carbon capture and storage

New Tax Credit for Manufacturing For projects which expand or establish manufacturing of “advanced energy property”, including –renewable energy –fuel cells, energy storage –smart electric grids –carbon capture –plug-in electric vehicles Competitive bidding process for $2.3 billion of tax credits