Please review this document for a complete understanding of how to maximize and utilize the incentives for a commercial photovoltaic system in Tennessee.
Total cost of the photovoltaic system $187,500.00
Tennessee Clean Energy Technology Grant $75,000.00
Balance $112,500.00
Business Energy Investment Tax Credit (ITC) $33,450.00
Balance $79,050.00
Modified Accelerated Cost-Recovery System (MACRS) + Bonus Depreciation (2008-2009) $52,962.50
Balance $26,087.50
TVA – Green Power Switch Generation Partners Program 10 year contract $35,999.94
Balance indicates a positive return on investment within the first 10 years, $9,912.44
(while still under the TVA Contract)
Notes:
The system price is based on the fact that the TCETG has a $75,000.00 cap. The RRETC can be applied over a 3 year period. The MACRS can be found at Publication 946 How To Depreciate Property. Is depreciable over a 5 year period. The TVA-GPSGPP is contracted for 12 cents above the local utility rate and an additional $1,000.00 sign on bonus. Generation figures used on this page are based on 1400 watts of annual generation for every 1 kilowatt of system size.
See www.pvwatts.org
Beyond the 10 year contract the system production will offset a proportional amount of electrical demands creating a reduced energy cost. The Appraisal Institute states that the value of the property is increased by $10-$20 for every $1 of electrical consumption offset. The system above would add around $23,333.00 to $46,666.00.
Small Business Energy Loan Program is a State Loan Program for Industrial & Commercial up to $300,000.00 for 7 years with 0% Interest available. EW56Bhttp://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=US31F&re=1&ee=1WH6PDZ6EFP
Residential Energy Conservation Subsidy Exclusion (Corporate) According to Section 136 of the IRS Code, energy conservation subsidies provided by public utilities,* either directly or indirectly, are nontaxable: “Gross income shall not include the value of any subsidy provided (directly or indirectly) by a public utility to a customer for the purchase or installation of any energy conservation measure.”
Energy-Efficient Mortgages Homeowners can take advantage of energy efficient mortgages (EEM) to finance a variety of energy efficiency measures, including renewable energy technologies, in a new or existing home. The U.S. federal government supports these loans by insuring them through Federal Housing Authority (FHA) or Veterans Affairs (VA) programs. This allows borrowers who might otherwise be denied loans to pursue energy efficiency improvements, and it secures lenders against loan default. EW56Bhttp://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=US48F&re=1&ee=1WH6PDZ6EFP
U.S. Department of Energy – Loan Guarantee Program Title XVII of the federal Energy Policy Act of 2005 (EPAct 2005) authorized the U.S. Department of Energy (DOE) to issue loan guarantees for projects that “avoid, reduce or sequester air pollutants or anthropogenic emissions of greenhouse gases; and employ new or significantly improved technologies as compared to commercial technologies in service in the United States at the time the guarantee is issued.” The loan guarantee program has been authorized to offer more than $10 billion in loan guarantees for energy efficiency, renewable energy and advanced transmission and distribution projects. The authority to issue loan guarantees granted by EPAct 2005 expires on September 30, 2009.
Residential Renewable Energy Tax Credit A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the United States and used as a residence by the taxpayer.
As you can see there are many incentives in place to reward installation of photovoltaics in Tennessee. The incentives are all applicable after the system has been installed and the installation company has been paid in full. SRPS will assist in the application of incentives but not the collection of. SRPS offers energy analysis, site location analysis, solar analysis, financial analysis, and solutions as inclusive services in our pricing.
Motivations for Photovoltaics include:
Energy Independence – reduce dependence on foreign energy sources. Future Cost Savings – hedge against future energy cost increases. Clean Environment – PV systems emit no pollutants. Increase Property Value – $20/$10 for every $1 of energy costs offset. Green Jobs – improves economy by keeping jobs and money local. Incentives – take advantage of Federal & State Incentives. Utility Bill Savings – reduce your energy costs. Environmental Leadership – become a community leader by utilizing clean, free, and renewable sunlight with a PV system.
