 Incentives
There are a variety of financial incentives available to Iowans
for renewable energy facilities and
equipment. These opportunities, however, often go untapped or are
not used to their fullest advantage chiefly because people don’t
know the programs are available or how to use them.
For example, Akron-Westfield School District worked with the Iowa
Energy Center’s Alternate
Energy Revolving Loan Program (AERLP) and the DNR Energy Bank
Program to install its 600kW wind turbine. Of the $705,000 needed
to purchase and install the turbine, the Energy Bank Program provided
$455,000 in low interest loans and the AERLP provided $250,000 at
zero interest, effectively saving the district $72,000 in interest.
When planning a renewable energy project, look for organizations
that can leverage the zero interest loans available from the Energy
Center through the AERLP. By taking this route, a qualifying organization
can fund its entire project upfront and repay the loan with the
energy savings - making the project budget neutral.
The following list of state and federal programs offer incentives
and financing options for developing renewable energy facilities.
While this listing is fairly comprehensive, it most likely is not
all inclusive. Other opportunities may exist with local municipalities,
business development groups or local utility companies.
It pays, literally, to explore all the options.
Alternate
Energy Revolving Loan Program
Type of Incentive:
loan program
Eligible Technologies:
wind, solar, biomass, hydro
Eligible Applicants:
commercial, industrial, residential
Funding Amounts/Limits:
half of financed cost, up to $250,000 ; 0% interest on AERLP's portion
of the loan.
Summary:
The AERLP provides loans to any individual or organization who wants
to build renewable energy production facilities in Iowa. Successful
applicants receive a single, low-interest loan that consists of
a combination of AERLP funds and lender-provided funds. The AERLP
provides 50% of the total loan, up to a maximum of $250,000 at 0%
interest. The remainder of the loan is made by the lender at a negotiated
interest rate. The maximum loan term allowed for the AERLP funds
is 20 years. As the loans are paid back to the Iowa Energy Center,
those funds revolve back into the program and are made available
to new applicants.
Contact:
Keith Kutz
Iowa Energy Center
515-294-8819
iec@energy.iastate.edu
Alternate Energy Revolving Loan Program website
Iowa Building Energy Management Program
Type of Incentive:
loan program
Eligible Technologies:
solar, wind, biomass, hydro, renewable fuels, energy efficiency
improvements
Eligible Applicants:
public and private K-12 schools, community colleges, area agencies,
hospitals, local government, private colleges and state agencies.
Funding Amounts/Limits:
variable
Summary:
The Iowa Building Energy Management Program (aka Energy Bank Program)
provides access to financing for energy management projects to public
and nonprofit agencies. The program first asks agencies to sign
a Memorandum of Agreement, indicating their interest in pursuing
energy improvements. Next, program staff help clients determine
the level of energy analysis necessary to meet their facilities’
needs and provide quality checks on the analysis. Participating
organizations are eligible to receive a six month interest-free
loan for the analysis costs. Staff help the agency develop an energy
management plan, prioritizing the improvements at the facility and
identifying funding. The program offers access to pre-negotiated
, low-interest financing for all clients, however, they are free
to use internal funds or other loan/grant resources.
Contact:
A.L Goldberg
Iowa Department of Natural Resources, Energy Section
515-281-8912
Allan.Goldberg@dnr.state.ia.us
www.iowadnr.com/energy/ebank/index.html
Iowa Renewable Fuel Infrastructure Program
Type of Incentive:
matching grant
Eligible Technologies:
E85 or biodiesel
Eligible Applicants:
industry, commercial
Funding Amounts/Limits:
(see summary)
Summary:
The Renewable Fuel Infrastructure Program has two primary components. One component is Retail Motor Fuel Sites for E85 or
biodiesel which exists to improve motor fuel sites by installing, replacing or converting motor fuel storage and dispensing infrastructure. The other component is Biodiesel Terminal Facilities which is a program to terminal facilities that store and
dispense biodiesel or biodiesel blended fuel.
An eligible applicant must be an owner or operator of a retail motor fuel site or of a biodiesel terminal and submit an application in the required form and content to the Iowa Department of Economic Development.
For retail motor fuel sites, financial incentives are on a cost share basis in the form of a grant. The maximum award shall not
exceed 50% of the actual cost of making the improvement or $30,000, whichever is less. The board may approve multiple
awards at a single site as long as the awards do not exceed 50% of the actual costs of the improvements or $30,000, whichever is less.
For biodiesel terminal facilities, financial incentives are on a cost share basis in the form of a grant. The maximum award shall not exceed 50% of the actual cost of making the improvement or $50,000, whichever is less. The board may approve multiple
awards at a single site as long as the awards do not exceed 50% of the actual costs of the improvements or $50,000, whichever
is less.
Projects need to be completed within eight (8) months of the award date. If not completed, the Board may approve an extension upon receipt of a proper request, otherwise the funds will revert back to the Renewable Fuels Infrastructure Program.
Contact:
Iowa Department of Economic Development
515-242-4700
www.iowalifechanging.com/
Local Option Special Assessment of Wind Energy
Devices
Type of Incentive:
property tax incentive
Eligible Technologies:
wind
Eligible Applicants:
commercial, industrial,residential
Funding Amounts/Limits:
local option
Summary:
This financing option allows any city or county to assess wind energy
conversion equipment at a special valuation for property tax purposes.
Local governments offering this special assessment must follow state
guidelines. In the first assessment year, the wind energy equipment
is assessed at 0% of its costs. For the second through sixth following
years, the property value increases by five percentage points each
year. For the seventh and succeeding years, the value of the property
is to be at 30% of its costs.
Contact:
Lee Vannoy, PE
Iowa Department of Natural Resources, Energy Section
515-281-6559
Lee.Vannoy@dnr.state.ia.us
Ethanol-Based Fuels Exemption
Type of Incentive:
sales tax incentive
Eligible Technologies:
renewable fuels
Eligible Applicants:
transportation
Funding Amounts/Limits:
1 cent per gallon, expiration date June 30, 2007
Summary:
Anyone who blends conventional motor fuel with alcohol to produce
ethanol can file for a refund for the difference between (sales)
taxes paid on the motor fuel purchased to produce ethanol blended
gasoline and the tax due on the ethanol blended gasoline. This tax
incentive is, in effect, an exemption for the sales tax on the value
added to the fuel when it is blended.
Contact:
Lee Vannoy, PE
Iowa Department of Natural Resources, Energy Section
515-281-6559
Lee.Vannoy@dnr.state.ia.us
Tax Credit for Clean-Fuel Vehicles
Type of Incentive:
Income tax deduction
Eligible Technologies:
Renewable and clean-burning-fuel vehicles
Eligible Applicants:
See IRS Publication 535 for eligibility
Funding Amounts/Limits:
variable
Summary:
The Energy Policy Act of 2005 replaced the clean-fuel burning deduction with a tax credit. A tax credit is subtracted directly from the total amount of federal tax owed, thus reducing or even eliminating the taxpayer’s tax obligation. The tax credit for hybrid vehicles applies to vehicles purchased or placed in service on or after January 1, 2006.
The credit is only available to the original purchaser of a new, qualifying vehicle. If a qualifying vehicle is leased to a consumer, the leasing company may claim the credit.
Hybrid vehicles have drive trains powered by both an internal combustion engine and a rechargeable battery. Many currently available hybrid vehicles may qualify for the tax credit.
Contact:
Internal Revenue Service
http://www.irs.gov/newsroom/article/0,,id=157632,00.html
Iowa Department of Revenue and Finance
http://www.state.ia.us/tax/index.html
Wind Energy Equipment Exemption
Type of Incentive:
sales tax incentive
Eligible Technologies:
wind
Eligible Applicants:
commercial, residential
Funding Amounts/Limits:
100% of project value
Summary:
This tax law exempts, from state sales tax, the total cost of wind
energy equipment and all materials used to manufacture, install
or construct wind energy systems.
Contact:
Lee Vannoy, PE
Iowa Department of Natural Resources, Energy Section
515-281-6559
Lee.Vannoy@dnr.state.ia.us
Property Tax Exemption for Solar Systems
Type of Incentive:
property tax incentive
Eligible Technologies:
solar
Eligible Applicants:
property owners
Funding Amounts/Limits:
100% of project value
Summary:
According to Iowa Code, Chapter 441.21, when assessing property
for tax purposes, assessors shall disregard any market value added
by a solar energy system to a building. Solar energy systems are
defined as a system capable of collecting and converting solar radiation
into thermal, mechanical or electrical energy; or a system that
uses the basic building design to maximize solar heat gain in the
cold season and minimize solar heat gain in the hot season.
Contact:
Bill Blum, Program Planner
Iowa Department of Natural Resources, Energy Section
515-281-6486
bill.blum@dnr.state.ia.us
Investment Tax Credit for Solar Energy Property
Type of Incentive:
federal tax incentive
Eligible Technologies:
solar
Eligible Applicants:
commercial entities who invest in or purchases qualified solar energy
property
Funding Amounts/Limits:
up to 10% of the investment/purchase and installation costs
Summary:
Anyone who invests in or purchases qualified solar energy property
can take advantage of this tax credit, up to 10% of the investment
or purchase and installation costs, when income tax forms are filed.
Only commercial entities qualify. This tax credit should not be
confused with the residential tax credit which permanently expired
in 1985.
Contact:
Solar Energy Industries Association
Washington,D.C.
202-628-7745
www.seia.org
Federal 5-Year Depreciation Schedule for Solar
Energy Property,
U.S. Government
Type of Incentive:
federal tax incentive
Eligible Technologies:
solar
Eligible Applicants:
commercial entities investing in or purchasing qualified solar energy
property
Funding Amounts/Limits:
up to 10% of the invest or purchase and installation costs
Summary:
The federal government is offering a 5-year accelerated depreciation
schedule for all solar energy equipment, including equipment that
uses solar energy to generate electricity, storage devices, power
conditioning equipment, transfer equipment and related parts, and
equipment up to point which transmits or uses electricity. The tax
incentive also includes dual use equipment only if it uses energy
from non-solar energy does not exceed 25% of its total energy input
in an annual measuring period.
Contact:
Solar Energy Industries Association
Washington,D.C.
202-628-7745
www.seia.org
DSIRE
Summary:
DSIRE is an ongoing project of the Interstate Renewable Energy Council
(IREC), funded by the U.S.Department of Energy's Office of Power
Technologies and managed by the North Carolina Solar Center. This
is a non-profit consortium of state and local government renewable
energy officials. It offers a range of market-oriented services
and products targeted at education, coordination and procurement.
Contact:
www.dsireusa.org
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