Stimulus Bill Lifts Cost Caps on Small Wind Turbine Tax Credit
On February 17, 2009, President Obama signed into law the economic stimulus bill that includes a provision to uncap the federal small wind turbine Investment Tax Credit (ITC) originally passed last October. The removal of the cost caps on the small-wind ITC will provide consumers with a true 30% tax credit for the purchase and…
On February 17, 2009, President Obama signed into law the economic stimulus bill that includes a provision to uncap the federal small wind turbine Investment Tax Credit (ITC) originally passed last October. The removal of the cost caps on the small-wind ITC will provide consumers with a true 30% tax credit for the purchase and installation of small wind turbines with rated capacities of 100 kilowatts or less.
The $787 billion stimulus bill contains a number of other provisions potentially benefiting small wind, such as:
- The option to receive a cash grant through the US Treasury in lieu of the ITC. Taxpayers who are eligible for an investment tax credit can receive an equivalent financial grant from the Department of Treasury instead of claiming the credit.
- An expansion of the Clean Renewable Energy Bond (CREB) program by $1.6 billion to finance facilities that generate electricity from a number of renewable resources, including wind.
- Expanded research and development funding of $1.25 billion through the Department of Energy’s Energy Efficiency and Renewable Energy program.
- Workforce training for renewable energy and energy efficiency careers.
- A new loan guarantee program through the Department of Energy for “commercial” and “innovative” technologies related to generation, transmission, and manufacturing of certain energy equipment.
- Repeal of subsidized energy financing limitation on the ITC. Under current law, the amount of the investment tax credit must be reduced if the property qualifying for the investment tax credit is also financed with industrial development bonds or through any other Federal, state, or local subsidized financing program. The bill repeals this subsidized energy financing limitation on the investment tax credit in order to allow businesses and individuals to qualify for the full amount of the investment tax credit even if such property is financed with industrial development bonds, or through any other subsidized energy financing.
- A new competitive 30% manufacturing credit for investment in qualifying property used to “re-equip, expand, or establish” a manufacturing facility used to produce certain renewable energy equipment.
- Extension of bonus depreciation for businesses. Last year, Congress temporarily allowed businesses to recover the costs of capital expenditures made in 2008 faster than the ordinary depreciation schedule would allow by permitting these businesses to immediately write off fifty percent of the cost of depreciable property (e.g., equipment, tractors, wind turbines, solar panels, and computers) acquired in 2008 for use in the United States. The bill extends this temporary benefit for capital expenditures incurred in 2009.
- Five-year carryback of net operating losses for small businesses.
The new changes have been incorporated into the Database for State Incentives for Renewables and Efficiency (DSIRE) site for reference.
Source: American Wind Energy Association