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Renewable Energy Production Incentives

Federal and State Incentives for Generating Energy from Waste

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The Renewable Energy Production Incentive (REPI) is a program that was created by the Energy Policy Act of 1992. It provides incentive payments for electricity generated and sold by new qualifying renewable energy facilities. Qualifying systems must generate electricity using solar, wind, geothermal (with certain restrictions), biomass (excluding municipal solid waste), landfill gas, livestock methane, or ocean resources (including tidal, wave, current and thermal).

The Renewable Electricity Production Tax Credit (PTC), a credit offered periodically for the production of electricity from renewable sources, is the federal government's main incentive program for renewable energy. The PTC offers wind, solar, geothermal, and closed-loop biomass systems a 1.8 cent credit per kilowatt hour generated. The credit is 0.9 cents per kilowatt hour for open-loop biomass, landfill gas, waste incineration, and small hydro (less than five megawatts). Technologies that qualify as renewable energy can change each year that the PTC is reauthorized. For example, the incineration of municipal solid waste now qualifies as renewable energy but did not previously.



The Biomass Energy Program assists businesses in installing biomass energy systems. Program participants receive up to $75,000 in interest subsidy payments. With an initial emphasis on biomass in the form of wood waste, the program now also focuses on switchgrass and municipal solid waste (MSW). Industrial, commercial and institutional facilities, agricultural property owners, and city, county, and state government entities are eligible. This program is renewed annually.


Emerging Renewables Rebate Program
The California Energy Commission offers cash rebates on fuel cell renewable energy electric-generating systems. Fuel cells convert sewer gas, landfill gas, or other renewable sources of hydrogen or hydrogen-rich gases into electricity by a direct chemical process.

Supplemental Energy Payments
Production Incentive, referred to as supplemental energy payments (SEPs), will be awarded to eligible renewable energy facilities to cover the above market costs of renewable resources selected by retail sellers to fulfill their obligations. Retail sellers are California's three largest investor-owned utilities: PG&E, SDG&E, and SCE. These payments are required by law, with funding of approximately $69.5 million. Eligible technologies include solar thermal electric, photovoltaics, landfill gas, wind, biomass, hydroelectric, geothermal electric, fuel cells, municipal solid waste, anaerobic digestion, tidal energy, wave energy, and ocean thermal. These contracts are availabe for a period of three to ten years.


Fuel Cell Grant Program
Four million dollars is available to help lower the cost of fuel cell technology meeting certain criteria.

New Energy Technology (NET) Program
This program offers up to $10,000 to Connecticut residents or businesses with more than 30 employees who develop innovative energy efficiency and renewable energy technologies to save energy, improve air quality, and help invigorate Connecticut's economy by creating employment opportunities. Applicable technologies include passive solar space heat, solar water heat, solar space heat, solar thermal electric, solar thermal process heat, photovoltaics, landfill gas, wind, biomass, hydroelectric, geothermal electric, fuel cells, geothermal heat pumps, municipal solid waste, solar pool heating, daylighting, anaerobic digestion, tidal energy, wave energy, ocean thermal, energy efficiency.


Hawaii offers a five year, 100 percent tax credit of up to two million dollars on an equity investment in a qualified high tech business (QHTB). A QHTB is defined as "a business that conducts more than fifty percent of its activities in qualified research which includes non-fossil fuel energy-related technology." This is defined as "energy produced by wind, solar energy, hydropower, geothermal resources, ocean thermal energy conversion, wave energy, hydrogen, fuel cells, landfill gas, waste to energy, biomass including municipal solid waste, and biofuels."


Using revenues generated from the sales of Green Tags, Bonneville Environmental Foundation (BEF), a not-for-profit organization, accepts proposals for funding for renewable energy projects located in the Pacific Northwest (Idaho, Montana, Oregon, and Washington). Any private person, organization, local or tribal government located in the Pacific Northwest may participate. Projects that generate electricity are preferred. Acceptable projects include solar photovoltaics, solar thermal electric, solar hot water, wind, hydro, biomass, and animal waste-to-energy.


The Renewable Energy Resources Program (RERP) is a state grant program offering rebates for small systems and grants for large systems. Technologies supported include solar water heat, solar space heat, solar thermal electric, photovoltaics, wind, biomass, municipal solid waste, dedicated energy crops, small hydroelectric, fuel cells (renewable fuels). Funding varies by technology but averages around $300,000. Grants are available on a request for proposal basis.


Businesses, non-profit institutions and units of local government (including public schools) are eligible to apply for grants of $30,000 or 30 percent of projected costs. Eligible projects include non-transportation applications of solar, wind, fuel cell, geothermal, hydropower, alcohol fuels, waste-to-energy, and biomass technologies. These applications may be applied to the direct generation of electricity (for either on-site use or placement of power onto a utility grid), heating and/or cooling of buildings, or the production of fuels. Grant proposals are accepted annually. Iowa offers a variable schedule grant based on available funds which has in the past supported research in biofuels, wind resource assessment, photovoltaic research, biomass gasification, energy-efficient livestock confinement ventilation, process manufacturing efficiency, and commercial building HVAC control.
The Renewable Resources Matching Fund (RRMF) offers up to $50,000 for projects which are undertaken in conjunction with certain higher education institutes in Maine. These funds are renewed annually.


The Massachusetts Technology Collaborative's (MTC) Commercial, Industrial, & Institutional Initiative (CI3) offered a total of $6,000,000 in grant funding to expand the use of distributed renewable energy generation at commercial, industrial and institutional facilities. Eligible technologies include wind energy, fuel cells, hydroelectric, photovoltaics, landfill gas, and low emission, advanced biomass power conversion technologies such as gasification using biomass fuels such as wood, agricultural or food wastes, energy crops, biogas, biodiesel, or organic refuse-derived fuel. The building or facility utilizing the power generated by the project must be grid-connected and greater than 50 percent of the renewable energy produced must be consumed on-site. This Initiative ends in 2007.

Tax Credit
Massachusetts offers a 100 percent tax deduction for any corporate and personal income received from the sale of or royalty income from a patent that is deemed beneficial for energy conservation or alternative energy development. This deduction is unique among incentives in that it targets patents and not simply hreal property.


Minnesota offers a payment of 1.5 cents per kilowatt-hour for electricity generated by hydro facilities and on-farm anaerobic manure methane digesters. Anaerobic digesters placed in operation after July 1, 2001, are also eligible. Qualifying projects receive payments for ten years. This is one of the few state-level, performance-based renewable energy incentives offered in the United States. This incentive expires December 31, 2017


See Idaho.


This statute allows certain new or expanded businesses a 50 percent property tax exemption for real and personal property used to generate electricity from renewable energy. The exemption may be taken over a ten year period by a business that uses renewable energy as its primary source of energy and that has a generating capacity of at least 10 kilowatts. Renewable energy includes biomass, municipal solid waste, solar, and wind. This programs expires on June 30, 2005.

New Mexico

This Production Tax Credit offers $0.01 per kilowatt-hour generated by photovoltaic, wind, and biomass. It is available for ten consecutive years at a maximum of $8,000,000 per year. The credit is applicable only to the first 400,000 megawatt-hours of electricity in each of ten consecutive years. To qualify, an energy generator must use a zero-emissions generation technology and have a capacity of at least ten megawatts.


See Idaho.


Penelac Sustainable Energy Fund (Penelac service territory).
The Sustainable Energy Fund of Central Eastern Pennsylvania

Grant Program
The Pennsylvania Departments of Environmental Protection (DEP) and Agriculture initiated a five million dollar program in 2003 to improve air quality, preserve land, and protect local watersheds while providing economic opportunities for the state's agricultural community. Eligible proposals for this grant program include renewable energy deployment, biomass energy projects, landfill methane, coal-bed methane, and waste coal reclamation for energy. Other eligible proposals include innovative energy efficiency technologies or clean distributed-generation infrastructure improvements. DEP is particularly interested in supporting proposals that are market-driven, spur investment, create jobs, and produce economic development within Pennsylvania.


See Idaho.


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