Small Wind Turbine Federal Tax Credit is Law
Small Wind Turbine Federal Tax Credit is Law (GEO)
The legislation signed into law on October 3, 2008 — the Energy Improvement and Extension Act as part of (i.e. Division B) H.R. 1424, the Emergency Economic Stabilization Act of 2008 — also includes a new federal investment tax credit to help consumers purchase small wind turbines for home, farm, or business use. Owners of small wind systems with 100 kilowatts (kW) of capacity and less can receive a credit for 30% of the total installed cost of the system, not to exceed $4,000. The credit will be available for equipment installed from today through December 31, 2016. For turbines used for homes, the credit is limited to the lesser of $4,000 or $1,000 per kW of capacity.
Earlier this week I posted another entry about this legislation with respect to the extension and expansion of a similar credit for the solar industry that was first passed in 2005. Residential and commercial solar PV installations can receive a 30% credit, capped at $4,000 for residential applications and uncapped for commercial uses.
Energy Improvement and Extension Act of 2008
On October 3, 2008, following weeks of contentious negotiations between the House and Senate, Congress approved, and the President signed into law the Energy Improvement and Extension Act of 2008 as part of (i.e. Division B) H.R. 1424, the Emergency Economic Stabilization Act of 2008 — a.k.a. the bailout bill.
Sec. 303 of the Energy Improvement and Extension Act of 2008 extends the Energy Efficient Commercial Buildings Tax Deduction from 2008 through 2013.
SEC. 303. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION – Subsection (h) of section 179D is amended by striking `December 31, 2008′ and inserting `December 31, 2013′.
What is the Energy Efficient Commercial Buildings Tax Deduction?
- The Energy Policy Act of 2005 created the Energy Efficient Commercial Buildings Deduction, which allows building owners to deduct the entire cost of a lighting or building upgrade in the year the equipment is placed in service, subject to a cap.
How does the Energy Efficient Commercial Buildings Tax Deduction apply to lighting upgrades?
- From January 1, 2006 until the Treasury Department issues final regulations defining savings targets for individual building systems, the Commercial Buildings Deduction’s Interim Rules for Lighting Systems are in effect. The Interim Rules offer an accelerated tax deduction that is the lesser of: The complete cost of installing energy-efficient interior lighting; or $0.30 to $0.60/sq.ft. proportional to lighting power density (watts per square foot) savings of 25% to 40% below ASHRAE the 90.1-2001 standard lighting power density, which varies by building type.
Click here for the full text of the Energy Improvement and Extension Act of 2008 as well as H.R. 1424. Table of contents provided below.
Provisions of solar investment tax credit (ITC) extension & expansion
Last week I highlighted some of the energy-related tax incentives that passed with the bailout bill earlier this month. One of those incentives is the 8-yr extension and expansion of the solar investment tax credit (ITC).
Federal Solar Tax Credits Extended for 8 Years (Green Energy Ohio)
This landmark legislation is part of H.R. 1424, the Emergency Economic Stabilization Act of 2008, designed to address the U.S. financial crisis. It is the most significant federal policy ever enacted for the solar industry. The solar investment tax credit (ITC) provisions will:
- Extend for 8 years the 30-percent tax credit for both residential and commercial solar installations;
- Eliminate the $2,000 monetary cap for residential solar electric installations, creating a true 30-percent tax credit (effective for property placed in service after December 31, 2008);
- Eliminate the prohibition on utilities from benefiting from the credit;
- Allow Alternative Minimum Tax (AMT) filers, both businesses and individuals, to take the credit;
- Authorize $800 million for clean energy bonds for renewable energy generating facilities, including solar.
According to a Navigant Consulting report, extending the ITC is expected to create 440,000 jobs and encourage $325 billion of private investment in the solar industry.
Cost-benefit studies of green roofs underway in NY
Weighing the Benefits of Green Roofs (WSJ)
Throughout New York City, studies are underway to see if green roof adoption should take root. Supporters say putting vegetation on the roofs of city buildings may reduce global warming — and save money in the long run. WSJ’s Shelly Banjo reports. (Oct. 6)
Airports implement “green projects” and renewable energy
An article last month in USA Today highlighted a variety of energy conservation measures and water conservation measures at airports, including an array of 20 miniature, 6-foot-tall wind turbines at Boston Logan International Airport. Once finished the complete array of wind turbines is expected to produce about 100,000 kilowatt-hours annually, equal to the electricity usage of about 17 average-sized homes. The airport may buy additional turbines depending on how well the first 20 turbines perform.
State renewable energy programs helped pay for the turbines at Boston Logan, where airport officials expect to see annual savings of $12,000 to $15,000, producing a 10 year payback. Boston Logan also replaced its fleet of diesel shuttle buses with natural gas vehicles, and designed the 2-year-old $500 million Terminal A to meet the highest national standards for energy efficiency.
Other green projects are popping up at airports around the country in response to rising fuel prices this year. The eco-friendly ideas and projects are expected to improve energy-efficiency and water-efficiency as well as public perception of the airports.
Residential natural gas prices are expected to be higher this winter.
Average household expenditures for all space-heating fuels are projected to be $1,137 this winter (October 1 to March 31), a 15-percent increase over the estimated $986 spent last winter, according to EIA’s Short-Term Energy and Winter Fuels Outlook released on October 7. The largest increases, 18 percent, will be in households using natural gas. About 52 percent of all households nationwide depend on natural gas as their primary heating fuel. The projected expenditure increases primarily reflect higher prices, although colder weather than last winter also is expected to contribute to higher fuel use in many areas.
Natural gas spot prices at their lowest levels this year
Natural Gas Weekly Update (EIA)
Spot natural gas prices moved lower this week at trading locations across the Lower 48 States, as fear of a slowing economy and turmoil on Wall Street affected the entire energy industry. Current instability in the banking sector is expected to have a variety of longer-term effects on the natural gas industry (including access to credit). This would considerably dampen demand for energy in all consuming sectors, but particularly affect demand in the industrial sector (where natural gas is the primary fuel for close to 40 percent of energy consumption). As concerns over the economy evolved this week, the price at the Henry Hub in Erath, Louisiana, fell to its lowest point since November 9, 2007, averaging $6.58 per MMBtu yesterday. On the week, the Henry Hub price was 83 cents per MMBtu lower, or about 11 percent less than on the previous Wednesday. On a regional basis, spot markets along the Gulf Coast in Louisiana and East Texas registered an average price decrease of $0.82 and $0.78 per MMBtu, respectively.
U.S. average price of regular gasoline drops below $3.50 for the first time since April 14.
This Week in Petroleum (EIA)
Gasoline and Diesel
The U.S. average price for regular gasoline plunged 14.8 cents to slip below $3.50 for the first time since April 14. Prices have now fallen for three weeks in a row, bringing the average to 348.4 cents per gallon, but are 71.4 cents above a year ago. The U.S. average diesel price dropped 8.4 cents to 387.5 cents per gallon. Prices settled below the $4 mark in all major regions of the country for the first time since March 10.
Read more
Cincinnati offers incentives to residents and businesses for green roofs
CINCINNATI (AP) — Officials want to see more green roofs on building tops in Cincinnati.
The City Council on Wednesday became the first in Ohio with a plan to channel grants and loans to residents and businesses to replace tar and shingles with vegetation.
Supporters of the idea want to see Cincinnati become a leader in green roofs, a European-born movement that has spread to only a few U.S. cities, including Chicago, Milwaukee and Seattle.
They say the greenery not only is pleasing aesthetically but reduces stormwater runoff, filters pollutants and cuts heating and cooling costs. Read more
Tennessee Valley Authority electricity rates jump 20 percent
TVA electricity rates jump 20 percent today (Times Daily)
The wholesale price of electricity jumped 20 percent today across north Alabama and portions of six other states as the Tennessee Valley Authority tries to cope with the rapidly rising cost of coal and power that it purchases from other utilities…For the average resident of the Tennessee Valley, the increase will mean about $20 more per month on the electric bill.
TVA spokesman Gil Francis said the rate adjustment, the largest in 34 years for the utility, is needed to help TVA pay for the coal used to produce the bulk of its electricity and other expenses.
“Central Appalachian coal that we were buying for about $60 per ton in January was costing $140 per ton in August,” he said. “The cost of transporting that coal to our power plants has also increased. When we have to purchase power from other utilities to meet peak demands, that also costs us more than it did at the beginning of the year. Plus our hydroelectric generation remains about 50 percent of normal for the year, which forces us to burn more coal and purchase more power to meet our customers’ demands for electricity.”
Explaining TVA’s Rates (EnergyBiz Insider)
It’s a function of supply and demand. More people are moving into the region and consuming more energy. But the utility’s supply is stretched. It imports much of its coal from China, which is now a scarce resource. Price increases for fuel, including coal, natural gas and purchased power are driving TVA’s costs up by more than $2 billion in fiscal year 2009, compared to fiscal year 2008.
At the same time, TVA has been able to generate only about half as much inexpensive hydropower this year as it would generate in an average year. When TVA cannot generate that hydropower — about 1,000 megawatts — it must buy replacement power at market prices. Those power prices are much greater than hydropower costs and were even higher this summer, averaging 63 percent higher than last summer.
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EIA: Retail Prices
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