Insulation is Sexy – New Payment Incentives

When it comes to renewable energy and efficiency measures we have an abundance of Federal, State, and utility based incentives to assist us.   Here are some of the incentive options that are offered federally and in Montana….

FEDERAL LOAN PROGRAM

Energy Efficient Mortgage: 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.

Eligible Efficiency Technologies: Yes; specific technologies not identified

Eligible Renewable/Other Technologies: Passive Solar Space Heat, Solar Water Heat, Solar Space Heat, Photovoltaics, Daylighting

Applicable Sectors: Residential

Web Site: http://www.resnet.us/ratings/mortgages

FEDERAL GRANTS

1. Tribal Energy Program Grant: The U.S. Department of Energy’s (DOE) Tribal Energy Program promotes tribal energy sufficiency, economic growth and employment on tribal lands through the development of renewable energy and energy efficiency technologies. The program provides financial assistance, technical assistance, education and training to tribes for the evaluation and development of renewable energy resources and energy efficiency measures.

Eligible Efficiency Technologies: Clothes Washers, Refrigerators, Water Heaters, Lighting, Lighting Controls/Sensors, Chillers , Furnaces , Boilers, Central Air conditioners, Programmable Thermostats, Energy Mgmt. Systems/Building Controls, Caulking/Weather-stripping, Duct/Air sealing, Building Insulation, Windows, Doors, Siding, Roofs, Comprehensive Measures/Whole Building, other energy efficiency improvements may be eligible

Eligible Renewable/Other Technologies: Passive Solar Space Heat, Solar Water Heat, Solar Space Heat, Photovoltaics, Wind, Biomass, Hydroelectric, Geothermal Electric, Geothermal Heat Pumps

Applicable Sectors: Tribal Government

Amount: Varies by solicitation

Maximum Incentive: Varies by solicitation

Web Site: http://www.eere.energy.gov/tribalenergy

2. US Department of Treasury Renewable Energy Grant:

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.

Eligible Renewable/Other Technologies: 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, CHP/Cogeneration, Solar Hybrid Lighting, Hydrokinetic, Anaerobic Digestion, Tidal Energy, Wave Energy, Ocean Thermal, Microturbines

Applicable Sectors: Commercial, Industrial, Agricultural

Amount: 30% of property that is part of a qualified facility, qualified fuel cell property, solar property, or qualified small wind property 10% of all other property

Maximum Incentive: $1,500 per 0.5 kW for qualified fuel cell property
$200 per kW for qualified microturbine property
50 MW for CHP property, with limitations for large systems

Web Site: http://www.treas.gov/recovery/1603.shtml

3. USDA – Rural Energy for America Program (REAP) Grant:

Eligible Efficiency Technologies: Yes; specific technologies not identified

Eligible Renewable/Other Technologies: Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Photovoltaics, Wind, Biomass, Hydroelectric, Renewable Transportation Fuels, Geothermal Electric, Geothermal Heat Pumps, CHP/Cogeneration, Hydrogen, Anaerobic Digestion, Small Hydroelectric, Tidal Energy, Wave Energy, Ocean Thermal, Renewable Fuels, Fuel Cells using Renewable Fuels, Microturbines, Geothermal Direct-Use

Applicable Sectors: Commercial, Schools, Local Government, State Government, Tribal Government, Rural Electric Cooperative, Agricultural, Public Power Entities

Amount: Varies Maximum Incentive: 25% of project cost

Web Site: http://www.rurdev.usda.gov/rbs/busp/bprogs.htm

FEDERAL PERSONAL EXEMPTION

Residential Energy Conservation Subsidy Exclusion: (Personal) 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.

Eligible Efficiency Technologies: Yes; specific technologies not identified

Eligible Renewable/Other Technologies: Solar Water Heat, Solar Space Heat, Photovoltaics Applicable

Sectors: Residential, Multi-Family Residential Amount: 100% of subsidy

Web Site: http://www.irs.gov/publications/p525/index.html

FEDERAL PERSONAL TAX CREDIT

1. Residential Energy Efficiency Tax Credit:

Eligible Efficiency Technologies: Water Heaters, Furnaces , Boilers, Heat pumps, Central Air conditioners, Building Insulation, Windows, Doors, Roofs, Circulating fans used in a qualifying furnace

Eligible Renewable/Other Technologies: Biomass, Stoves that use qualified biomass fuel

Applicable Sectors: Residential Amount: 30%

Maximum Incentive: Aggregate amount of credit for all technologies placed in service in 2009 and 2010 combined is limited to $1,500

Equipment Requirements: Equipment must be new and in compliance with all applicable performance and safety standards as described in tax code Web Site: http://www.energystar.gov/taxcredits

2. Residential Renewable Energy Tax Credit:

Eligible Renewable/Other Technologies: Solar Water Heat, Photovoltaics, Wind, Fuel Cells, Geothermal Heat Pumps, Other Solar Electric Technologies
Applicable Sectors: Residential
Amount: 30%
Maximum Incentive: Solar-electric systems placed in service before 1/1/2009: $2,000
Solar-electric systems placed in service after 12/31/2008: no maximum
Solar water heaters placed in service before 1/1/2009: $2,000
Solar water heaters placed in service after 12/31/2008: no maximum
Wind turbines placed in service in 2008: $4,000
Wind turbines placed in service after 12/31/2008: no maximum
Geothermal heat pumps placed in service in 2008: $2,000
Geothermal heat pumps placed in service after 12/31/2008: no maximum
Fuel cells: $500 per 0.5 kW
Carryover Provisions: Excess credit may be carried forward to succeeding tax year
Eligible System Size: Fuel cells: 0.5 kW minimum
Equipment Requirements: Solar water heating property must be certified by SRCC or by comparable entity endorsed by the state in which the system is installed. At least half the energy used to heat the dwelling’s water must be from solar. Geothermal heat pumps must meet federal Energy Star requirements. Fuel cells must have electricity-only generation efficiency greater than 30%.
Web Site: http://www.energystar.gov/taxcredits ,

IRS Form 5695 & Instructions: Residential Energy Credits

STATE TAX INCENTIVES

1. Energy Conservation Installation Credit: Individual taxpayers may claim a credit against their tax liability for up to 25% of the costs of investment for energy conservation purposes in a building.

Eligible Efficiency Technologies: Water Heaters, Lighting, Lighting Controls/Sensors, Chillers , Furnaces , Boilers, Heat pumps, Central Air conditioners, Programmable Thermostats, Caulking/Weather-stripping, Duct/Air sealing, Building Insulation, Windows, Doors

Applicable Sectors: Residential, Multi-Family Residential

Amount:25% of cost of capital investment

Maximum Incentive:$500

Web Site: http://mt.gov/revenue/energyconservationcredit.asp

2. Residential Alternative Energy System Tax Credit: Residential taxpayers who install an energy system using a recognized non-fossil form of energy on their home are eligible for a tax credit equal to the amount of the cost of the system and installation of the system, not to exceed $500 or $1,000 per household.

Eligible Renewable/Other Technologies: Passive Solar Space Heat, Solar Water Heat, Solar Space Heat, Photovoltaics, Wind, Biomass, Geothermal Heat Pumps, Low-Emission Wood Stoves, Small Hydroelectric, Fuel Cells using Renewable Fuels

Applicable Sectors: Residential

Amount:100%

Maximum Incentive:$500 per individual taxpayer; up to $1,000 per household Carryover Provisions:Excess credit may be carried forward four years

Eligible System Size: Hydroelectric systems not to have generation capacity greater than 1 MW

Equipment Requirements: Systems must be new and in compliance with all applicable performance and safety standards

Web Site: http://revenue.mt.gov/revenue/energyconservation.asp

3. Residential Geothermal Systems Credit: A resident individual taxpayer of Montana who installs a geothermal heating or cooling system in their principal dwelling can claim a tax credit based on the installation costs of the system, not to exceed $1,500.

Use Montana Department of Revenue Form ENRG-A to claim this tax credit.

PRODUCTION INCENTIVES

1. Northwest Solar Cooperative – Green Tag Purchase: The Northwest Solar Cooperative* (NWSC) offers to purchase the rights to the environmental attributes or “Green Tags” derived from grid-connected photovoltaic (PV) or wind energy at a rate ranging from $0.02 per kilowatt-hour (kWh) to $0.10/kWh. Residential and non-residential owners of PV and wind-energy systems installed after June 1, 2002, in Oregon, Washington, Idaho and Montana are eligible to participate in the Green Tag Purchase Program.

The contract term does not have a fixed duration. Interested participants sign an agreement with NWSC to sell their Green Tags, report any system failures and submit AC production meter readings each year. The NWSC agrees to make payments to participants by March 31 of the year following production of Green Tags.

*The NWSC is a not-for-profit service operated by Solar Oregon. It purchases Green Tags from many individual private sellers throughout the region, aggregates them, and sells them in one package to 3 Degrees Energy who, in turn, sells them to wholesale customers and consumers.

PROPERTY TAX INCENTIVE

1. Renewable Energy Systems Exemption: Montana’s property tax exemption for recognized non-fossil forms of energy generation or low emission wood or biomass combustion devices may be claimed for 10 years after installation of the property. The exemption is allowed for up to $20,000 in value for single-family residential dwellings and up to $100,000 in value for for multifamily residential dwellings or nonresidential structures. This property is class 4 property and otherwise would be taxed on 3.01% of assessed value.

Recognized forms of energy generation include solar photovoltaics, passive solar, wind, solid waste, decomposition of organic wastes, geothermal, small hydropower plants, low-emission wood or biomass combustion systems, and fuel cells that do not require hydrocarbon fuel.

Use Montana Department of Revenue Form AB-14 to claim this exemption.

2. Renewable Energy Production Incentive (REPI):

Established by the federal Energy Policy Act of 1992, the federal Renewable Energy Production Incentive (REPI) provides incentive payments for electricity generated and sold by new qualifying renewable energy facilities. Qualifying systems are eligible for annual incentive payments of 1.5¢ per kilowatt-hour in 1993 dollars (indexed for inflation) for the first 10-year period of their operation, subject to the availability of annual appropriations in each federal fiscal year of operation. REPI was designed to complement the federal renewable energy production tax credit (PTC), which is available only to businesses that pay federal corporate taxes.

Eligible Renewable/Other Technologies: Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Geothermal Electric, Anaerobic Digestion, Tidal Energy, Wave Energy, Ocean Thermal
Applicable Sectors: Local Government, State Government, Tribal Government, Municipal Utility, Rural Electric Cooperative, Native Corporations
Amount: 2.1¢/kWh (subject to availability of annual appropriations in each federal fiscal year of operation)
Terms: 10 years
Web Site: http://apps1.eere.energy.gov/repi

STATE LOAN PROGRAM

Alternative Energy Revolving Loan Program: The Alternative Energy Revolving Loan Program (AERLP) provides loans to individuals, small businesses, local government agencies, units of the university system, and nonprofit organizations to install alternative energy systems that generate energy for their own use.

Eligible Efficiency Technologies: Building Insulation, Windows, Doors, Appliances, when installed as part of the alternative energy project

Eligible Renewable/Other Technologies: Solar Water Heat, Photovoltaics, Landfill Gas, Wind, Biomass, Geothermal Heat Pumps, Small Hydroelectric, Fuel Cells using Renewable Fuels, Geothermal Direct-Use

Applicable Sectors: Commercial, Residential, Nonprofit, Schools, Local Government

Amount: Varies

Maximum Incentive: $40,000

Terms: Up to 10 years; 4.0% interest rate for 2010 Web Site: http://www.deq.mt.gov/Energy/Renewable/altenergyloan.mcpx

UTILITY BASED INCENTIVES

1. NorthWestern Energy – USB Renewable Energy Fund:

In 1997, Montana established the Universal System Benefits (USB) Program. The USB requires all electric and gas utilities to establish USB funds for low-income energy assistance, weatherization, energy efficiency activities, and development of renewable energy resources. A typical NorthWestern Energy residential customer pays approximately $1 per month in electric USB charges. About $9 million is collected annually by NorthWestern, and about $750,000 is used for renewable energy projects.

Eligible Renewable/Other Technologies: Photovoltaics, Wind, Hydroelectric Applicable Sectors: Commercial, Industrial, Residential

Amount: PV: $3.00/watt
Wind: $2/watt Maximum Incentive:PV: $6,000

Wind: $10,000 Web Site: http://www.northwesternenergy.com/display.aspx?Page=Renewable_Ene

2. NorthWestern Energy – E+ Business Partners Program: The E+ Business Partners Program offers funding for local energy conservation and load management projects in new and retrofit applications including commercial, institutional, industrial, agricultural, and multi-family residential facilities/systems.

Eligible Efficiency Technologies: Retrofit and new construction applications

Applicable Sectors: Commercial, Industrial, Multi-Family Residential, Agricultural, Institutional

Amount: Varies

Web Site: http://www.northwesternenergy.com/display.aspx?Page=Business_Part

3. NorthWestern Energy – Residential Energy Efficiency Rebate Program: NorthWestern Energy offers a variety of rebates for their residential customers to make energy efficiency improvements in their existing homes.

Eligible Efficiency Technologies: Equipment Insulation, Water Heaters, Lighting, Furnaces , Boilers, Programmable Thermostats, Energy Mgmt. Systems/Building Controls, Building Insulation, Comprehensive Measures/Whole Building, Cooking Equipment

Applicable Sectors: Residential

Amount:ENERGY STAR® CFLs: $2 per bulb
ENERGY STAR® hard-wired CFL fixtures: $15 per fixture
Programmable Thermostats: $30/unit
Gas Heating Equipment: Varies by technology and efficiency
Insulation: Varies by efficiency and location

Maximum Incentive:Lighting: maximum of fifteen CFLs and five lighting fixtures per calendar year
Programmable Thermostat: Two units per household

Funding Source: Funding for these rebates is provided through NorthWestern Energy’s natural gas and electric supply rates.

Web Site: http://www.northwesternenergy.com/display.aspx?Page=Rebates_Home_

4. NorthWestern Energy – Commercial Energy Efficiency Rebate Program: NorthWestern Energy offers multiple rebate programs for their commercial and industrial customers to make energy efficient improvements to their businesses.

Eligible Efficiency Technologies: Equipment Insulation, Water Heaters, Lighting, Lighting Controls/Sensors, Furnaces , Boilers, Heat recovery, Programmable Thermostats, Energy Mgmt. Systems/Building Controls, Duct/Air sealing, Building Insulation, Windows, Motors, Motor-ASDs/VSDs, Commercial Cooking Equipment, Stack Heat Exchangers, Boiler Tune-Up, DHW Circulation Pump Time Clock Applicable Sectors: Commercial, Industrial, Irrigation Supply

Amount: Lighting: Varies based on bulb/fixture type ($1.00 to $40.00) or energy saved (10-50 cents per watt saved).
Motors: $13-$600 depending on HP and efficiency rating
Motor Rewind Program: $40-$500 depending on HP and RPM
Furnace/Boiler: $3.25 (KBtu/hr)
Water Heater: $2.50 (KBtu/hr)
Stack Heat Exchanger: $0.50 (KBtu/hr)
Griddle: $4.00 (KBtu/hr)
Fryer: $6.00 (KBtu/hr)
Refrigeration Heat Recovery: $1.00 (OA-CFM)
Boiler Tune-Up: $100
DHW Circulation Pump Time Clock: $100
EMS Optimization: $500
Water Heater Tank Insulation: $35
Other Insulation (equipment and building): varies $0.30 – $1.50 (per linear or square ft of insulation)
Windows: $3.50 (per square foot of window)
Energy Star Programmable Thermostat: $0.08 (per square ft of controlled area)

Maximum Incentive: Lighting: Rebates will not be provided for lamps or fixtures placed in stock in excess of 5% of installed equipment.

Equipment Requirements: Varies greatly by product, see application forms. Funding Source: Funding provided through NorthWestern Energy electric default supply rates for its default supply customers. Web Site: http://www.northwesternenergy.com/display.aspx?Page=Rebates_Busin

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The Obama administration has called on Congress to pass a new incentive program for home energy efficiency upgrades called Home star. Created to help bolster the hard hit construction sector and national security by decreasing foreign energy dependence Home star will create tens of thousands of jobs and save home owners billions of dollars in long term energy reductions not to mention green house gases.  Rebates will be provided directly to the consumers and the federal government will reimburse accredited contractors and utilities for efficiency work performed. (SBS does this type of work.)

There are two tiers of the program: Gold star and Silver star.   Gold star is a two-year program that will provide between $3,000-$8,000 for 20%+ modeled savings for home owners.  Homeowners will need an audit by a RESNET HERS Rater or BPI Building Analyst Certified Professional to assess energy savings through improvements before work begins.  Work must be performed by a Gold star accredited contracting company.

Silver star is a one-year program which will qualify homeowners to receive between $1,000-$1,500 for each qualified efficiency measure, $250 per appliance, with a cap of $3000or 50% of project costs whichever is less. Qualified measures include: air sealing, attic, wall, and crawlspace insulation, duct sealing or replacement, replacement of existing windows, doors, furnaces, air conditioners, heat pumps, water heaters, and appliances with high-efficiency models.  When this bill passes through congress (expected in the next few months) there will be a huge demand for audit and efficiency retrofit work.

The Retrofit for Energy and Environmental Performance (REEP) Program Act has been submitted to the House Energy and Commerce and House Financial Services Subcommitees.  This bill Requires: (1) the Administrator of the Environmental Protection Agency (EPA) to develop and implement standards for a national energy and environmental building retrofit policy for single-family and multifamily residences; (2) the Secretary of Energy (DOE) to develop and implement standards for a national energy and environmental building retrofit policy for commercial buildings; and (3) the program to implement such policies to be known as the Retrofit for Energy and Environmental Performance (REEP) program.

Requirements of the REEP program: (1) facilitate the retrofitting of existing buildings to achieve maximum cost-effective energy efficiency improvements and significant improvements in water use and other environmental attributes; and (2) provide financial assistance to states, to be administered through the State Energy Program, for management and accomplishment of the program’s objectives at the individual building level. Authorizes states and local agencies to offer free or low-cost building audits, incentives, technical assistance, training, incentive financing, and other forms of assistance to individual building owners. Requires the Administrator and the Secretary to assist states and local agencies in establishing revolving loan funds or other forms of financial assistance.

Also, view President Obama’s presentation on Retrofitting for Energy Efficiency and New Jobs to get pumped about energy efficiency: Insulation is sexy!

President Obama\’s presentation on Retrofitting for Energy Efficiency and New Jobs

Contact SBS today to learn more about additional rebates, ratings and grants.  The offerings are constantly changing and we’re doing our best to stay on top of all the options.  Feel free to comment here with related incentives that would be important to share.

One reply

  1. This is really great, thanks for putting this up. I read your blog all the time and find your site very educational and helpful. Keep them coming! :)

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