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Megan Birney: Businesses Reach for the Sun — Above and Beyond Solar for Homes

To date, solar power has mostly had a home run, but new incentives are providing commercial appeal

There should be solar panels on every home in the nation. But there should also be solar on every business, government building and school. Solar power can minimize our need for electricity from fossil fuel-based sources and limit the need to build large-scale solar installations (although we will still need to build these, along with wind farms, wave farms and geothermal power plants). Fortunately, the federal government has now recognized the importance of renewable energy for both our environment and our economy, and has included several key incentives in the recent stimulus bill. Some of the most exciting provisions are summarized below:

Megan Birney
Megan Birney

» Renewable Energy Grants: Commercial properties are currently eligible for a 30 percent tax credit through 2016, but with the current economic downturn, some companies are losing business and do not have adequate tax liability. TheAmerican Recovery and Reinvestment Act creates a new program that provides grants for 30 percent of the cost of solar installations placed in service during 2009 and 2010 (Div. B, Sec. 1104, p. 38). This grant program is important because it allows companies with no tax liability to invest in solar power.

» Extended Bonus Depreciation: Last year, Congress temporarily increased the amount (50 percent of the cost of capital investment) that small businesses could write off for capital expenditures incurred in 2008 to $250,000 and increased the phase-out threshold for 2008 to $800,000. The stimulus bill extends these temporary increases for capital expenditures incurred in 2009. Accordingly, until the end of 2010 small business taxpayers are allowed to write off up to $125,000 (indexed for inflation) of capital expenditures, subject to a phase-out once capital expenditures exceed $500,000 (indexed for inflation) (Div. B, Sec 1202, p. 74).

» Remedy for Alternative Minimum Tax and R&D Credits in Lieu of Bonus Depreciation: When a business has lost money and is unable to deduct its depreciation, this provision extends the allowance in the Foreclosure Prevention Act of 2008 that permits Alternative Minimum Tax and allows taxpayers to receive 20 percent of the value of their old AMT or R&D credits when they invest in assets, like solar, that qualify for bonus depreciation. This credit is available for systems placed in service and for tax years after Dec. 31, 2008 (Div. B, Sec 1201(b), p. 71).

» Renewable Energy Loan Guarantee Program: The current credit crisis has made financing solar projects increasingly difficult so this guarantee program establishes a temporary loan guarantee program for renewable energy projects, renewable energy manufacturing facilities and electric power transmission projects. Projects must begin construction by Sept. 30, 2011. This guarantee program is intended to add security by having the federal government be the ultimate guarantor for a loan, allowing more renewable energy projects to be financed in today’s difficult credit markets.

Also, as taxpayers, we should be conscientious of the long-term costs of operating government-owned buildings. To bring down these operational costs, the stimulus bill has also provided funding for federal buildings and schools to increase energy efficiency and transfer to renewable energy sources.

» Solar on Federal Property: To convert general service facilities to high-performance green buildings, this appropriation allocates $5.5 billion to construct, repair and alter federal buildings for energy-efficiency upgrades and solar energy equipment (Div. A, Title V, General Services Administration, p. 88).

» Solar for Schools: 18.2 percent of state stabilization funds is allocated to public safety and other government services, including the renovation of facilities and schools to meet green building standards, including solar energy projects (Div. A, Sec. 14001-14002, pp. 425-429).

For more information on putting solar panels on your home, business or school, come meet local installers at the Community Environmental Council’s South Coast Earth Day Festival on April 19 in Alameda Park. Or click here for additional CEC solar resources.

— Megan Birney is the Community Environmental Council’s renewable energy project specialist.

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