Take advantage of tax credits
Energy efficiency and renewable energy provide reliable returns on investment, and now is a great time to take advantage of energy-related tax incentives as well as other incentives offered by your state, local government, or utility. The American Recovery and Reinvestment Act (ARRA) of 2009, also known as the stimulus package, will have a tremendous effect on many energy-related activities in the U.S. Commercial and industrial customers can benefit from new tax credits enacted in ARRA 2009 for on-site renewable energy production, and they might also qualify for tax credits for facilities that manufacture advanced energy components and systems.
In addition, there are no new tax incentives for commercial and industrial energy efficiency in ARRA 2009, but you can benefit from pre-existing tax deductions for energy-efficient commercial buildings. Those deductions were originally authorized by the Energy Policy Act of 2005 and were extended until Dec. 31, 2013, by the Emergency Economic Stabilization Act of 2008. Additionally, ARRA 2009 grants to state and local government may be used to create programs concerning energy efficiency and renewable energy in the commercial and industrial sectors. A helpful place to start learning more about energy incentives is the Database for State Incentives for Renewables & Efficiency (DSIRE) at www.dsireusa.org; it also covers federal incentives.
More information on:
Energy-efficient commercial buildings tax deduction
Renewable-energy tax credits and grants
Qualifying advanced energy project investment tax credit
Additional resources
• The federal government’s official ARRA 2009 Web site is www.recovery.gov.
• The DOE’s Recovery Web site (www.energy.gov/recovery) has more information on energy efficiency and renewable-energy initiatives as well as links to what individual states are doing. New commercial and industrial energy incentives may be funded by states using ARRA funds like block grants and state energy program grants, so it’s important to stay informed.
• An Energy Star brochure on the commercial building tax deduction provides a how-to guide for building owners and can be found at www.energystar.gov/ia/business/comm_bldg_tax_incentives.pdf.
• The TIAP presents a helpful summary of assistance for commercial buildings at www.energytaxincentives.org/business/commercial_buildings.php.
• The IRS supplies tax guidance for commercial buildings at www.irs.gov/irb/2006-26_IRB/ar11.html.
• DSIRE is an excellent resource for state and federal policies and incentives such as tax credits (www.dsireusa.org).
Disclaimer: This information serves as general guidance and a resource to help you make the most of the opportunities presented by ARRA 2009 and other energy policies. It’s important that you consult a tax professional for your specific needs.
Please note that some of the provisions may require that Internal Revenue Service regulations be written and adopted, or updated; and eligible investments must be placed in service before the end of 2013 for commercial buildings tax deductions.