RSI Green Energy Solution:
Go green now, companies, schools and individuals it is time under the new U.S. Stimulus Package and small wind tax credits for homeowners and businesses.
For more information: [email protected]
U.S. Tax Credits of 30%, LOANS and GRANTS for Wind Projects
Grants and Tax Savings For All
RSI has researched the depreciation issues for the WindGen turbine, and had our tax research department look into it as well.
Fact: If the wind turbine is purchased and placed into service and is 100 KW or smaller, it can be depreciated over 5 years and is eligible for Section 179 and the 50% bonus depreciation.
Also, we can find no rulings that require the tax credit or grant to offset basis (which is 30% right now on wind). This means that the full cost of the wind turbine is eligible to be depreciated. And you get 30% as a grant or tax credit also when you install a unit.
Fact: In December 1998, the Kansas legislature enacted a property tax examption for all property actually and regularly used in the generation of electricity from renewable resources, whether it is industrial, commercial, utility or personal application. Kansas State statute 79-201, Chapter 79 Taxation, article 2 - Property Exempt from Taxation.
Federal U.S. Tax credits are now available for home improvements:
Small Wind Energy Systems
Residential Small Wind Turbines
Has nameplate capacity of not more than 100 kilowatts.
30% of the total cost
Must be in service before December 31, 2016.
US Treasury 30% Tax Credit and Grants for Wind Turbine(s) FAQ
Q: What does the stimulus package mean for you?
A: The entire cost of a wind system (plus installation) is reduced by 30 percent. Depending on where you live, you could save much more! The stimulus package allows for a 30 percent tax credit on the total cost of multiple units. There is no cap on the 30 percent tax credit.
All States are also implementing rebates for small wind which can be added to the Federal credit. In the last two months alone, more than 33 States have introduced legislation that either expands incentives for renewable energy and/or addresses market barriers.
The stimulus package allows for a 30 percent tax credit on the total cost of multiple units. There is no cap on the 30 percent tax credit.
Q: Can Businesses get cash back rather than a tax credit – how does that work?
A: Yes, this applies to businesses only. You can apply for a grant from the US treasury and rather than a tax credit, receive a cash grant. As of June 30 2009.
The American Recovery and Reinvestment Act of 2009 (H.R. 1) allows taxpayers eligible for the federal business energy investment tax credit (ITC) to take this credit or to receive a grant from the U.S. Treasury Department instead of taking the business ITC for new installations. The new law also allows taxpayers eligible for the renewable electricity production tax credit (PTC) to receive a grant from the U.S. Treasury Department instead of taking the PTC for new installations. (It does not allow taxpayers eligible for the residential renewable energy tax credit to receive a grant instead of taking this credit.) Taxpayers may not use more than one of these incentives. Tax credits allowed under the ITC with respect to progress expenditures on eligible energy property will be recaptured if the project receives a grant. The grant is not included in the gross income of the taxpayer.
Rural Energy For America Program Grants
(REAP Grants) 25% of Project
The REAP/Feasibility Grant Program will provide grants for energy audits and renewable energy development assistance. It also provides funds to agricultural producers and rural small businesses to conduct feasibility study for a renewable energy system.
How much are the grants?
The grants are awarded on a competitive basis and can be up to 25% of total eligible project costs.
Who is eligible?
The program is designed to assist small businesses, farmers, and ranchers. All agricultural producers, including farmers and ranchers, who gain 50% or more of their gross income from the agricultural operations are eligible. Small businesses that are located in a rural area can also apply. Rural electric cooperatives may also be eligible to apply.
What types of projects are eligible?
Eligible feasibility studies for renewable energy systems include projects that will produce energy from wind, solar, biomass, geothermal, hydro power and hydrogen-based sources. The energy to be produced includes, heat, electricity, or fuel.
For all projects, the system must be located in a rural area, must be technically feasible, and must be owned by the applicant.
Rural Energy for America Program Guaranteed Loan Program (REAP LOAN)
The REAP Guaranteed Loan Program encourages the commercial financing of renewable energy (bioenergy, geothermal, hydrogen, solar, wind and hydro power) and energy efficiency projects. Under the program, project developers will work with local lenders, who in turn can apply to USDA Rural Development for a loan guarantee up to 85 percent of the loan amount.
|Guaranteed Loan Specifications
- Loans up to 75% of the project’s cost
- Maximum of $25 million, minimum of $5,000
Maximum percentage of guarantee (applies to whole loan):
- 85% for loan of $600,000 or less
- 80% for loans greater than $600,000 but $5 million or less
- 70% for loans greater than $5 million up to $10 million
- 60% for loans greater than $10 million up to $25 million
Fees and Interest Rates
- Lender’s customary interest rate, fixed or variable, negotiated by lender and business Lender’s customary fees, negotiated by lender and business
- One-time guarantee fee equal to 1% of guaranteed amount
- Annual renewal fee
Benefits to Businesses
Benefits include higher loan amounts, stronger loan applications, lower interest rates and longer repayment terms that can assist businesses that may not qualify for conventional lender financing.
Benefits to Lenders
Lender benefits include expanding lender’s loan portfolio, allowing lenders to make loans above loan limits, protecting guaranteed portion of loan against loss by the Federal Government, existing secondary market for REAP guarantees, helping to satisfy Community Reinvestment Act (CRA) requirements, and allowing lenders to use their own forms, loan documents, and security instruments.
Eligibility: Borrowers, Lenders, Location
New definition being determined. Borrowers must be an agricultural producer or rural small business. Agricultural producers must gain 50% or more of their gross income from their agricultural operations. An entity is considered a small business in accordance with the Small Business Administration’s (SBA) small business size standards NAICS code. Most lenders are eligible, including national and state-chartered banks, Farm Credit System banks and savings and loan associations. Other lenders may be eligible if approved by USDA.
Eligible Project Costs
Eligible project costs include: 1) Post-application purchase and installation of equipment, 2)Post-application construction or improvements, 3) Energy audits or assessments, 4) Permit or license fees, 5) Professional service fees, 6) Feasibility studies and technical reports, 7) Business plans, 8) Retrofitting, 9) Construction of a new energy efficient facility only when the facility is used for the same purpose, is approximately the same size, and based on the energy audit will provide more energy savings than improving an existing facility, 10) Working capital, 11) Land acquisition.