Tag Archives: tax credits

Thoughts from our Intern: MT Renewable Energy Factoids

Our Energy Intern/Office Manager, Nick Bowman, recently gave this short talk for one of his classes at UM.  We thought it made for an interesting blog post which has some talking points about renewable energy you might not have heard or might find interesting or useful:

Montana, with its huge potential for renewable energy, could do more to use its resources to help strengthen the economy.

Montana is currently ranked 22nd in the nation for the amount of renewable energy produced, yet has enough available resources to become 3rd in the nation if properly developed and invested.

Montana potential for wind is due to its topography. High mountains combined with spacious plains are perfect for developing wind farms. Wind Energy alone has enough power to produce 370 times the amount of electricity used by the state. Here is a great potential for economic growth.

In places where buildings are a barrier, as they decrease the amount of wind which can be harvested, we could use solar power to create renewable energy gains.  We need to increase the monetary incentives for solar installation, particularly in light of the cancelation of energy grants by Northwestern Energy.

Montana is also one of 13 states which can produce energy from geothermal hot spots. The technology of geothermal is constantly improving and needs to be developed in order for this technology to be effective without compromising the environment.

Yet with all this in mind Montanas still spend 4.7 billion dollars to produce fossil fuels every year.

Increased implementation of green energy is only possible through the contribution of the average American who wants to better this great nation. Political activism, alternative energy advocacy and service are among the few ways which people can contribute to helping renewable energy succeed in this struggling economy. I would recommend that, if nothing else, each and every person reminds their representatives that they support sustainable energy.

Let’s make a difference.

Nick Bowman

Top Solar PV Testimonial, Ever.

(What follows is quite possible the best Solar PV testimonial we could ever ask for.  With pictures!  We hope you agree.)

 

SBS Solar
401 South Orange St, Unit C
Missoula MT 59801

Dear SBS Solar:

Solar PV Pergoal, Central Missoula, Montana

I’m writing to share my great experience with your company and my 100% solar-powered home. In the fall of 2011, SBS installed a 24 panel, 6 kW, grid-tied solar PV system at my home in central Missoula. Because my house had additions, I don’t have one flat surface for the panels, so SBS hired subcontractors to design and install a covered back porch structure for the panels. I started producing all of my own power in the early spring and now in the summer am producing 50% morepower than I need. I will receive a credit for this extra power and it will mitigatethe power use in December or January when I might be producing as little as 30%of own my power.

100% Solar powered electric car, from home Solar PV system in Missoula, Montana

I recently installed more efficient appliances, and thus I will probably producemore power than I use this year. This surplus of power led me to decide to lease a 100% electric car, which will be 100% solar-powered car for at least 6 or 8 monthsout of the year.

I felt compelled to act because we can’t afford to ignore the signs of climate change or the role we play in it. I feel a moral obligation to reduce my carbon footprint, to protect biodiversity and protect the planet for future generations. Can you imagine the reduction of coal and oil consumption we could achieve if every family in Western Montana had a solar-powered home and solar-powered electric car? Maybe mega-loads, tar sands mining, and Otter Creek coal mining would all become unnecessary. The technology is available and ready for this now inWestern Montana.

The cost breakdown for my solar system:

COSTS INCLUDING STRUCTURE:

Materials and installation for PV system: $28,570
New back porch structure:$8,640
Engineering of structure:$1,643
City building permit for structure:$285
Relocation of power/gas lines for structure:$3,605
Electric panel relocation:$620
GROSS Total:$43,363

Northwestern Energy Grant ($6,000)
Federal Tax Credit($11,208)
State Tax Credit($500)
NET Total including structure:$25,655

 

COSTS EXCLUDING STRUCTURE:
Materials and installation for PV system: $28,570
Northwestern Energy Grant ($6,000)
State Tax Credit($500)
Federal Tax Credit($8,625)
NET Total excluding structure:$13,625

So essentially, the solar system had a net cost of less than $14,000 for 100% annual power.

The system will eventually pay itself off and then the power I use in my home and the “fuel” I use for my car will be free. While this is certainly a meaningful reward, for me the bigger reward is knowing that my decision to choose an alternative to coal and oil is a concrete physical step toward a safer planet for future generations. As Terry Tempest Williams has said: “The eyes of the future are looking back at us and they are praying for us to see beyond our own time. They are kneeling with hands clasped that we might act with restraint, that we might leave room for the life that is destined to come.”

Thank you for the important work you are doing.

Sincerely,

Rebecca Smith
(contact info withheld to maintain customer privacy.  Please contact SBS Solar directly for more information) 

 

 

Demistifying Solar Tax Incentives

I recently gave a talk for the Montana Sustainable Business Council on the incentives available for energy conservation.  I touched on federal and state tax credits, utility based grants and rebates and the state of Montana DEQ Revolving Loan Fund for renewable energy.

In the talk I mentioned that there has been some question as to whether the 30% federal tax credit for renewable energy installation (which is no cap and can be carried forward for multiple years), is to be taken on the gross cost of the system or the net cost (after applied utility grants) of the system.

Turns out it’s either — depending on your system, residential or commercial, according to Kenton D. Swift, PhD, CPA, Associate Professor of Accounting, The University of Montana, School of Business Administration.

He was in the audience at my talk and was kind enough to approach me afterward to further discuss this question.  After some research he got back to me via email with the following information:

I wanted to give you a little information about one part of your presentation. When a homeowner installs a solar pv system, and receives a utility rebate, they need to reduce the cost of the system by the utility rebate before calculating the 30% federal tax credit. For instance, if the system costs $13,000 and the utility rebate is $6,000, the credit would be 30% of $7,000 or $2,100. This is actually the way you calculated the credit in your presentation, but you hinted it might be possible to take the 30% credit on the full cost. This seems to be a common confusion.

There are actually two separate 30% federal income tax credits, one for personal residences (IRC Code Sec. 25D), and one for business (IRC Code Sec. 48). Generally, the credits are the same except for this one issue about netting utility rebates. The law requires that the rebate be netted against the cost before calculating the 30% credit when taking the residential credit (IRC Code Sec. 25D). I have attached a recent letter from the IRS chief counsel’s office which describes this netting process. Again, it is the same way you actually did your example at the meeting, which is great.

For the 30% federal BUSINESS credit (IRC Code Sec. 48) there is no specific requirement to net the utility rebate against the cost of the system, before calculating the credit. Actually, there does not seem to be any current law explaining what to do. Thus, I believe that when taking the business credit, most taxpayers take the credit on the full cost of the system, before utility rebates. This is a better result than one can get when calculating the residential credit.

I hope that helps to clarify a confusing issue, which you have handled very well.

Someone at the meeting also asked about the property tax exemption for solar pv systems in Montana. Kent went on to clarify that “such systems are exempted from property taxes for 10 years.”

At SBS Solar we go to the DSIRE database for all of this information and have even been referred to this site by the IRS when we called them about the above questions!  This is also the site that Kent relies on for much of his information, or confirmation of information.  He notes that he has “checked their information for many states, and it always seems to be up-to-date, when I compare their explanation to state law.”

Feel free to be in touch with SBS Solar on your energy conservation incentive questions, or to get a project started in Montana.

Green Blocks – Final Phase

SBS has had a wonderful and successful time on the side-order list for the City of Missoula’s Green Blocks energy saving program.

We began work back in the Fall of 2010 by getting 2-inters from the University of Montana’s COT Energy Program and got them fully trained on doing a basic solar site assessment.

Our Team ended up doing over 120 assessments over the course of 3-months last fall.  They braved blazing sun, side-ways rain and blowing snow from October – December.  But, it was well worth it.

This spring 2011 marked the final phase of this project.  The City added about 60-90 participants to get to their total count of 300.  We got ourselves another COT Energy intern for this past Spring and he went out and did about 48 more solar site assessments.

Half way through this phase we saw an 18% REDUCTION in the cost to install solar, plus the state and feds decided to KEEP the tax credits in place for renewable, Northwestern Energy gave us a dozen more $6k grants to hand out to customers in good standing, and the MT DEQ revolving loan fund keeps on chugging along (although they are 8-10 weeks out on funding).  To top it off, SBS starting taking credit cards for deposits.

The wet cold spring made for a slow start, and with the unseasonably cool summer, folks were not thinking about solar.  But with the aforementioned incentives, and a little 90 degree weather, we are in full swing.  Over half of the installs we’re doing in July and August came from Green Blocks leads and SBS is now booked out until September.

Thanks to the City of Missoula for this great opportunity!  We’d love to do it again.

If you’re interested in information about solar – get in touch: www.SBSlink.com or info@sbslink.com.

SBS Summer Reading Heating Up: Solar? Conservation? Efficiency

While there certainly has been a lot of talk lately about the weather, and whether global warming is real or not, the concept of climate change is certainly on our minds (or should be).  It seems that catastrophic weather events are more prevalent than ever: from tornadoes to floods to tsunamis, earthquakes, mudslides and volcanic eruptions.

In response to these major weather events, and in an effort to gain some knowledge, I have been doing some summer reading.

First on the list is a behemoth of a book – and worth the hundreds of pages – Hot, Flat and Crowded by Thomas Friedman. Simply put: We are getting hotter as a globe from fossil fuel energy dependence.  We are getting flatter as a world through wireless technology.  We are getting more crowded as a world through population growth. This book points out, more than ever, the mounting global energy crisis with the advent of a larger-than-life working-class in major cities around the world,  namely China and India.  It also details some very viable ways we could remedy the current situation and prevent total global melt-down – like applying the idea of a smart grid to our utility use and billing, efficiency and renewable now (not later), government mandates and crackdown for laziness in getting on board, and even suggesting that the USA needs to getting into a race w/ China to “out green” one another – akin to the space race with former USSR that put a man on the moon in short order.

Another great read, and a bit shorter, is an  article in Rolling Stones:  “Al Gore: Climate of Denial: Can science and the truth withstand the merchants of poison?”  This article addresses the question of whether we are all in denial about climate change or not.  Former Vice-President Al Gore emphatically says “Yes, we are in denial.”  The final paragraph states:

The climate crisis, in reality, is a struggle for the soul of America. It is about whether or not we are still capable — given the ill health of our democracy and the current dominance of wealth over reason — of perceiving important and complex realities clearly enough to promote and protect the sustainable well-being of the many. What hangs in the balance is the future of civilization as we know it.

And finally, the shortest of all the reads, an article from Newsweek: “It’s still the Economy, Stupid. 14 Ways to put America back to Work” by 42nd President Bill Clinton. In June 2011 in Chicago, the Clinton Global Initiative (CGI) focused on America for the first time, inviting business and political leaders to make specific commitments in support of the former president’s jobs blueprint, which he details in this article. Here Clinton outlines his plans for economic stimulation.  Interestingly enough, the first half circled around energy efficiency and the funding there of.  Namely, #2 Cash for Startups, #3 Jobs Galore in Energy, #4 Copy the Empire State Building, #5 Get the Utilities in on the Action, #6 State-by-State Solutions, and #8 Paint ‘Em White.  And, really, all fourteen talk about energy conservation relating to economic stimulus in one way or another.

So sit back, try to relax and enjoy the reading.  (Then change out all your light bulbs to CFLs and LEDs, install a solar array and fix that leaky faucet.)

SBS Intalls Solar for Ravalli Co Habitat for Humanity

According to the Bitterroot Star, last week the the fifth home by Ravalli County Habitat for Humanity was completed and keys handed over to the owners. The new home is on Cherry Street in Hamilton and now belongs to Travis Sanderson and his family.

Much of the materials for the home were donating, including a Solar PV system – made possible through the work of Sustainable Building Systems (SBS) and Northwestern Energy’s Solar PV grant.  This system will reduce the family’s prior heating bill of $350/month in winter to around $80/month.

Read the entire coverage from the Bitterroot Star here.

Solar Prices drop up to 25%!

After a PV module industry wide cost reduction, sourcing a lower cost mount system and dealers giving better pricing on all balance of system components, SBS has new numbers for potential Solar PV customers in MT that represent up to a 25% reduction in installed costs for PV systems!

If you couple the new lower prices with a $6000 Northwestern Energy PV grant, the 30% Federal Tax credit for renewable energy and the $500/$1000 (single/couple) State Tax credit, the costs are lower than every before.

And here in Montana, we can add to that a 10-year, 4% financing option (oac) from the MT DEQ revolving loan fund for renewable energy.

For a 2kw, 9 module system, total cost to the customer is in the $12,000.00 range.

After incentives this is roughly 3,200.00 out of pocket.

This on average powers about 25-40% of the average Montana home.

Here is an example of plausible breakdown for that $12,000 system

$12,000 GROSS
– $1000 (deposit to SBS to begin work)
=$11,000 NET
-$6,000 (NWenergy PV grant)
=$5,000 – Financed w/ MT DEQ loan
120-months
4%
=$51/month

Yes, that is correct, for at little at $51/month for a 10-year period, you can cover up to 40% of your energy bill. Awesome.  Check out this PV for more information: SolarPVFinancing-Basics-final.

And, when you file your taxes at the end of the year on that system, you’ll still get the $1800 Federal credit and the $500/$1000 state credit back.  You can keep these to use however you’d like, or put that money into your DEQ loan for early pay off (there is not penalty for early pay).

For a free solar site assessment, or to learn more, contact us at SBS today: info@sbslink.com, www.sbslink.com, 406-541-8410.

To get a general estimate of your solar or other renewable energy needs, try our Solar Calculator here.

New SBS Solar PV Customer Profile

Customer Name, location, system size:
Keegan Eisenstadt, Rattlesnake Valley, Missoula, Montana, 3450 watt solar PV system

What turned you on to Solar?

My father was a solar energy engineer in the 70s-80s in New Mexico.  They have had water heating panels on their house since then.  Additionally, my own work at ClearSky Climate Solutions is related to changing the course of climate change – which is predominantly driven by human demands for energy.  The clear need for more distributed generation of power from renewable sources is the most important element to reducing the emissions of greenhouse gases, and leaving a more stable world to my children.  Solar is a great way for me to practice what I preach, and also get a great price on power for my house!

What brought you to SBS?

SBS is an innovative, Missoula company that is looking at a holistic approach to analyzing and reducing energy use (and greenhouse gas emissions) of planned and existing structures.  My company works to mitigate carbon footprints with its clients, and a linkage to SBS was a natural for us.  Once I started learning more about what SBS does, I realized that I needed them to install a system on my home.  The solar system install team at SBS proved to be smart, capable and thorough.  I also think they are genuinely as excited about my system as I am!!!  I know they log into my system’s internet monitoring pages to see how it is performing, not daily as I do (which is great fun!), but at least weekly.

Racking system in, panel get ready!

What were your goals for this system?

My goals for the system were threefold: 1) make my house a laboratory for how to mitigate climate change with distributed generation of renewable power (which is something I have thought about, talked about, and worked towards for years), 2) give me a better-than-market price on electricity – which it will certainly do, and 3) provide an educational/outreach opportunity for my community to see just how easy it is to make your own power!

The financial incentives available right now for installing domestic alternative energy systems are good: 30% federal tax credit, $500/tax payer state tax credit, NorthWestern Energy grants, and low interest loans available.  My system will be financially paid off in 10 years, using a 4% fixed loan from federal stimulus money.  The system payback, from the energy created will be between 8-12 years, depending upon how fast prices for energy rise, and the panels on my system have a 25 year warranty.  So, my house will make roughly 1/3 of it’s power for free from about year 10 until 25.  That’s a good power bill!

Josh setting the first panel. Check out the nice lines on those racks and micro-inverters.

What do you like best about your system?

Actually, I’m surprised by this answer.  I had no idea how much more aware of energy use in my house I would become.  I now see/feel the house using energy….literally with the real-time monitoring tools that are part of the installation.  I turn on the stove, microwave, the stereo and I can see the kilowatts used jump.  It is amazing……I know that the mot

or in my refrigerator uses about 95 kW, that a big light fixture in the living room is 225 kW, that the microwave and clothes dryer are huge energy HOGS.  Frankly, I wasn’t really aware of those things before.  I never really internalized the energy demand of things in my house that way.  Even being interested in these things, I hadn’t internalized them in a tangible way.  It is such a surprise, and I am really enjoying it.  I’m sure in time, I will be happier with the cost savings….but right now, I am learning a lot and feeling great about it!

We just finished installing a 3450 watt solar PV system in the Rattlesnake where we employed 16 Enphase micro inverters. Micro inverters offer several advantages over more conventional string inverters.

Micro-inverters, monitoring and mountains...

Each solar module power production is optimized individually so little module mismatching occurs.  As well, if one module is shaded from a nearby tree, this one module will have reduced output, not the entire series string of modules as with the larger string inverters.  This advantage alone makes a huge difference but the pluses don’t end here.

The Enphase engineers designed one of the coolest monitoring programs found in the PV world.  Each individual module reports its power output over the existing AC output wiring to your in home computer or with internet service, this data is directed to the company’s website where current and cumulative data is displayed and stored.

A good graphic says a thousand words so if you are interested check out this link to the Enphase monitoring examples.

For more information on Solar or to talk with Dan:

Dan Brandborg
NABCEP certified Solar installer dbrandbog@sbslink.com

There is Hope: Energy Efficiency and Solar Energy Tax Credits & Grants for 2011

Over 80% of Montana’s housing stock was built prior to 1980. These homes offer the largest opportunity for Montana to reduce energy consumption through retrofitting and consumer education, as well as a huge opportunity to bolster our local economy by growing the green-collar job sector with verifiers and installers to do this work.

The fact remains that the majority of residents in these 1980 and older homes tend to be first-time home buyers, the elderly, and working-poor. Even when the desire is there, the main sticking point in Montana seems to be the ability for a consumer to cover first-costs on a project. There is a fair amount of assistance out there for those who qualify and are willing to do the work to recover it.

As of late, there has been much debate and confusion over the continuation of certain tax credits, grants and rebates that were implemented during or enhance as part of the American Recovery and Reinvestment Act (ARRA). In many cases, a project must be third-party verified or certified to qualify for some of these rebates or credits.  There is good news and bad news:

The bad news is that a few of these options have shrunk back to pre-recession era levels.

The good news is that there is still a lot of money out there for Energy Efficiency and Renewable Energy applications in the residential and commercial sectors.

ENERGY EFFICIENCY TAX CREDIT:  There has been an Energy Efficiency tax credit around for a while. It was traditionally a 10% credit, maxing out at $500. For the past couple years this was increased to 30% and $1500 cap. For 2011 we are back to the originally levels of 10% and $500 cap. This article offers a great overview of the information for 2011 as well as eligible projects, mounts and forms to get started, scroll down to point 3 for 2011 info.

RENEWABLE ENERGY TAX CREDIT:  The big kicker that keeps on giving is the 30% renewable energy tax credit. It has no monetary cap and is still in place through 2016. This credit can also be carried forward for a few years should you expect a year in the future where it might be more helpful. In addition to the website above, the information at Energy Star is also quite good.

NEW HOME TAX CREDIT:  While these credits are for retrofitting to existing buildings, there are great incentives for new construction as well. A credit of $2000 is still available to home builders who build homes (including both site-built and manufactured homes) projected to save at least 50% of the heating and cooling energy of a comparable home that meets the standards of the 2004 International Energy Conservation Code (the 2003 code including the 2004 supplement). A $1000 credit is available to manufactured home producers for models that save 30% or that qualify for the federal Energy Star Homes program.

In most cases a third-party verifier is needed to qualify that the home is indeed projected to save at least 50% over a comparable home. Businesses should have RESNET or BPI certification and the ability to offer a REM/Rate reading. Other incentives are offered through Northwest Energy Star homes and the NAHB Green program.

CHECK LOCALLY:  It is also a great idea to see what sort of complimentary tax credits or rebates are offered by your state governments and local utilities. In Montana, the Energy Conservation Installation Credit is a tax credit applied against a taxpayer’s income tax liability. Montana resident individuals can claim the credit for energy conservation investments made to a home or other building. The credit is equal to 25% of expenses, up to a maximum credit of $500. Two or more people may each qualify for the credit, as long as the building in which the investment is made is owned by all of the people claiming the credit.

As well, The Alternative Energy System Credit is a tax credit against income tax liability for the cost of purchasing and installing an energy system in a Montana resident’s principal home that uses: (1) a recognized nonfossil form of energy such as, but not limited to, solar energy, wind energy, solid waste, and organic waste; or (2) a low emission wood or biomass combustion device such as a pellet or wood stove. The credit cannot exceed $500. Two or more people may each qualify for the credit, as long as the building in which the investment is made is owned by all of the people claiming the credit. For further instructions on the alternative energy system credit, and to calculate this credit, see Montana Form ENRG-C.

SOLAR PV GRANT IN MONTANA:  As far as utilities go, there Co-Ops and others tend to have different offerings and you’ll have to check with yours for the best information. For much of Montana, Northwestern Energy offers a $6000 grant for Solar PV installations that are at least 2kW in size. The installer must be NABCEP certified for the project to qualify for the grant. Here at SBS both of our installers have the NABCEP certification, so we have a handful of these grants to give away to customers in 2011 and were able to do apply over 10 of these grants to projects in 2010.

MT REVOLVING LOAN FUND FOR RENEWABLES:  As well, here in Montana, we have access to the MT DEQ revolving loan fund. This is a 10-year note at 4% for renewable energy implementation. Each project must be at least 80% renewable energy and can have up to 20% energy efficiency in the mix. That would mean on a $10,000 loan a minimum of $8000 would have to go to renewable implementation and up to $2000 for efficiency implementation. We find that at least half of our customers take the time to go through this application as it is well worth their while.

Here is the breakdown on the rebates for a basic 2kW qualifying solar system for a Missoula household with 2-income earners. A system of this size tends to offset 20-30% of the average MT home’s energy use. Coupled with basic energy efficiency measures and small changes in behavior, it is not uncommon to find 35-50% of energy use offset in the end:

$15,000 2kW Solar PV system
-$6,000 NWenergy PV grant
=$9,000 NET COST
-$2,700 30% Federal Tax Credit
-$1,000 MT Alternative Energy System Credit
=$5,300 NEW Net Cost

If this couple also wanted to implement energy efficiency measures and get the MT DEQ loan, this is a plausible breakdown. They could choose to take the loan based on the gross amount of the System or the net cost at the bottom. If they take it on the gross, this couple would end up having much more than the $3500 allocated below for their efficiency work:

$15,000 2kW Solar PV system (including parts, labor, permits, engineering, etc…)
+ $3,500 extra for some energy efficiency work
= $18,500 TOTAL MT DEQ Loan amount
$ 180 approx. monthly payment

In addition to the federal& state tax credits as well as the utility solar grant in the example above, this customer would also qualify for the additional $500 in federal tax credits from the Energy Efficiency tax credit listed above, as well as numerous rebates from Northwestern Energy with a few more here.

Here at Sustainable Building Systems (SBS) we have the needed certifications listed above in order to work with you on your energy efficiency projects.  Of course, SBS is not a licensed tax preparer and more information on tax credits and energy efficiency incentives is available at www.dsireusa.org .  This summary in no way constitutes guaranteed savings; we recommend consulting an accountant to verify how tax credits apply to you.

If you would like more information of getting started with an energy audit, implementing energy efficiency measures or a renewable energy application, give a call today: 406/541.8410 or visit us at www.SBSlink.com. Here you’ll find access to our Solar Calculator and a basic questionnaire on getting started with SBS.

Remember, the Greenest Energy is the Energy We Don’t Use.

Molly Bradford
Marketing Director
mbradford@sbslink.com

Green Blocks, Phase II

WOW – 120 solar site assessments!

That right, out of the 300 participants in the City of Missoula’s Green Blocks Program we were chosen by 120 participants to do solar site assessments.  This is great news.  I had hoped we’d be a popular Side Order, but this blew our minds.  In fact, we are even getting a second intern from the UM-COT energy program to help with the work load!

Over the next 6-week our interns will be going block by block through the 120 sites to do a basic assessment with our Solar Pathfinder.  We will contact folks a week in advance so they know their block is up next.  Then we’ll do a quick visual assessment and/or a Pathfinder assessment in each yard.

Each participant will be told if they are a good, fair or poor site, why, and what options are available to them according to their results (i.e. PV, Thermal or other renewables like ground source heat pumps).  We will also provide info on available grants, tax credits, rebates and financing for their Solar and Renewable options.

SBS is very excited to be working with the City of Missoula, Northwestern Energy, the COT’s Energy degree program and all of the other Green Blocks Side Orders.  This really is a model public-private project to be duplicated.