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Government and Utility Incentive Summaries

By: Markeus Farrand

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Table of Contents

1. South Carolina (Pg. 6) a. State and Federal

1) Biomass Energy Tax Credit 2) Biomass Energy Production Incentive 3) Business Energy Investment Tax Credit 4) Solar Energy and Small Hydropower Tax Credit 5) Renewable Electricity Production Tax Credit 6) Energy-Efficient Commercial Building Tax Deduction 7) Renewable Energy Manufacturing Tax Credit

b. Utility 1) York Electric Cooperative- Dual Fuel Heat Pump Rebate

Program 2) Santee Cooper Commercial Energy Efficiency Rebate

Program 3) Duke Energy- Non-Residential Energy Efficiency Rebate

Program 4) SCE&G- Commercial EnergyWise Program 5) Progress Energy Carolinas- Commercial Energy Efficiency

Program 6) Santee Cooper- Business Custom Rebates

2. Georgia (Pg. 17) a. State and Federal

1) Business Energy Investment Tax Credit 2) Renewable Electricity Production Tax Credit 3) USDA- Repowering Assistance Biorefinery Program 4) Modified Accelerated Commercial Building Tax Deduction 5) USDA- Rural Energy for America Program (Energy Audit and

Renewable Energy Development Assistance Program) 6) REAP (Grants) 7) REAP (Loan Guarantees) 8) USDA- High Energy Cost Grant Program 9) Georgia Green Loans Save and Sustain Program 10) Biomass Sales and Use Tax Exemption

b. Utility 1) TVA- Mid-Sized Renewable Standard Offer Program 2) Sawnee EMC- Commercial Energy Efficiency Rebate Program 3) TVA- Solar Solutions Initiative 4) Georgia Power- Commercial Energy Efficiency Program 5) TVA- Energy Right Solutions for Business

3. North Carolina a. State and Federal

1) USDA- Biorefinery Assistance Program

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2) Business Energy Investment Tax Credit 3) Renewable Energy Tax Credit (Corporate) 4) Renewable Electricity Production Tax Credit 5) NC GreenPower Production Incentive 6) USDA- Repowering Assistance Biorefinery Program 7) Modified Accelerated Cost- Recovery System 8) Energy Efficient Commercial Buildings Tax Deduction 9) USDA- Rural Energy for America Program (Grants) 10) REAP (Loan Guarantees) 11) USDA- High Energy Cost Grant Program 12) U.S. Department of Energy- Loan Guarantee Program 13) Active Solar Heating and Cooling Systems Exemption 14) Property Tax Abatement for Solar Electric Systems

b. Utility 1) TVA- Mid-Sized Renewable Standard Offer Program 2) TVA- Solar Solutions Initiative 3) TVA- Green Power Providers 4) South River EMC- Energy Efficiency Rebate Program 5) Duke Energy (Electric)- Non-Residential Energy Efficiency

Rebate Program 6) TVA- Energy Right solutions for Business 7) Duke Energy Progress- Commercial and Industrial Energy-

Efficiency Program 8) Randolph EMC- Commercial and Industrial Efficient Lighting

Rebate Program 9) Tideland EMC- Weatherization Loan Program

4. Alabama (Pg. 56) a. State and Federal

1) USDA- Biorefinery Assistance Program 2) Business Energy Investment Tax Credit 3) Renewable Electricity Production Tax Credit 4) USDA- Rural Energy for America Program (Energy Audit and

Renewable Energy Development Assistance Program) 5) REAP (Grants) 6) REAP (Loan Guarantees) 7) USDA- Repowering Assistance Biorefinery Program 8) Modified Accelerated Cost-Recovery System 9) Energy-Efficient Commercial Building Tax Deduction 10) USDA- High Energy Cost Grant Program 11) AlabamaSAVES Revolving Loan Program

b. Utility 1) TVA- Mid-sized Renewable Standard Offer Program 2) TVA- Energy Rights Solutions for Business 3) TVA- Solar Solutions Initiative 4) TVA- Green Power Providers

5. Florida (Pg. 74)

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a. State and Federal 1) Renewable Energy Production Tax Credit 2) USDA- Biorefinery Assistance Program 3) Business Energy Investment Tax Credit 4) Solar and CHP Sales Tax Exemption 5) Renewable Electricity Production Tax Credit 6) JEA- Commercial Energy Efficiency Rebate Program 7) U.S. Department of Energy- Loan Guarantee Programs 8) USDA- Rural Energy for America Program (Energy Audit and

Renewable Energy Development Assistance) 9) REAP (Grants) 10) REAP (Loan Guarantees) 11) USDA- Repowering Assistance Biorefinery Program 12) Modified Accelerated Cost- Recovery System 13) Energy- Efficient Commercial Building Tax Deduction 14) USDA- High Energy Cost Grant Program

b. Utility 1) Florida Power and Light- Solar Rebate Program 2) Florida Power and Light- Business Energy Efficiency Rebates 3) Progress Energy Florida- Commercial Energy Efficiency

Rebate Program 6. Kentucky (Pg. 93)

a. State and Federal 1) Tax Exemption for Large-Scale Renewable Energy Projects 2) Tax Credits for Renewable Energy Facilities 3) USDA- Biorefinery Assistance Program 4) Business Energy Investment Tax Credit 5) Renewable Electricity Production Tax Credit 6) USDA- Rural Energy for America Program (Energy Audit and

Renewable Energy Development Assistance) 7) REAP (Grants) 8) REAP (Loan Guarantees) 9) USDA- Repowering Assistance Biorefinery Program 10) Modified Accelerated Cost- Recovery System 11) Energy- Efficient Commercial Buildings Tax Deduction 12) USDA- High Energy Cost Grant Program 13) Incentives for Energy Cost Grant Program 14) Incentives for Energy Independence 15) Sales Tax Exemption for Manufacturing Facilities 16) Energy Efficiency Tax Credits (Corporate) 17) Renewable Energy Tax Credit (Corporate)

b. Utility 1) TVA- Mid-Sized Renewable Standard Offer Program 2) TVA- Solar Solutions Initiative 3) TVA- Green Power Providers 4) TVA- Energy Right Solutions for Business

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5) Duke Energy- Non Residential Energy Efficiency Rebate Program

7. Tennessee (Pg. 117) a. State and Federal

1) USDA- Biorefinery Assistance Program 2) Business Energy Investment Tax Credit 3) Sales Tax Credit for Clean Energy Technology 4) Green Energy Property Tax Assessment 5) Renewable Electricity Production Tax Credit 6) USDA- Rural Energy for America Program (Energy Audit and

Renewable Energy Development Assistance) 7) REAP (Grants) 8) REAP (Loan Guarantees) 9) USDA- Repowering Assistance Biorefinery Program 10) Modified Accelerated Cost- Recovery System 11) Energy- Efficient Commercial Buildings Tax Deduction 12) USDA- High Energy Cost Grant Program 13) Sales and Use Credit for Emerging Clean Energy Industry 14) Green Energy Tax Credit

b. Utility 1) TVA- Mid- Sized Renewable Standard Offer Program 2) TVA- Solar Solutions Initiative 3) TVA- Green Power Providers 4) TVA- Energy Right Solutions for Business

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South Carolina (back to top) 8. Biomass Energy Tax Credit

a. In 2007 South Carolina enacted the Energy Freedom and Rural Development Act (S.B. 243), which amended previous legislation concerning a landfill methane tax credit. The original legislation, enacted in 2006, allows a 25% corporate tax credit for costs incurred by a taxpayer for the use of landfill methane gas to provide power for a manufacturing facility. The 2007 amendments allow taxpayers a credit against the income tax and/or license fees for 25% of the purchasing and installation cost of equipment used to create heat, power, steam, electricity, or another form of energy. Fuels used by the equipment must be for commercial use and consist of at least 90% biomass resources. In 2011, the South Carolina Department of Revenue issued a private ruling that the tax credit could be applied to an individual's income taxes. Specifically, a limited liability company (LLC) utilizing the biomass tax credit is allowed to pass through the credit to the shareholders of an S Corporation owning 60% of the parent LLC, provided there are at least four shareholders and that all are residents of South Carolina. Costs incurred by a taxpayer must be certified by the State Energy Office, in consultation with the South Carolina Department of Agriculture and the South Carolina Institute for Energy Studies, in order to qualify for the credit. The tax credit for all expenditures is limited to $650,000 per taxpayer year and may not exceed 50% of a taxpayer's liability for that year. Unused credits may be carried forward for 15 years. For a fiscal year, all claims may not exceed $650,000 and must apply proportionately to all eligible claimants. To obtain the maximum amount of credit available, the taxpayer must submit a request for credit to the State Energy Office by January 31st for all qualifying equipment placed in service in the previous calendar year. The State Energy Office must notify the taxpayer that it qualifies for the credit and the amount of credit allocated to the taxpayer by March 1st of that year. For purposes of this credit, a biomass resource means non-commercial wood, by-products of wood processing, demolition debris containing wood, agricultural waste, animal waste, sewage, landfill gas, and other organic materials, not including fossil fuels. "Commercial use" means a use intended for the purpose of generating a profit. A "manufacturing facility" means an establishment where tangible personal property is produced or assembled.

9. Biomass Energy Production Incentives

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a. Note: New claimaints are only eligible to receive this credit through June 30th, 2018 and will not be eligible to receive the credit for a full five-year term.

b. In 2007 South Carolina enacted the Energy Freedom and Rural Development Act, which provides production incentives for certain biomass-energy facilities. Eligible systems earn $0.01 per kilowatt-hour (kWh) for electricity generated or $0.30 per therm (100,000 Btu) for energy produced from biomass resources. These incentives are available to systems that did not produce energy from biomass resources before June 30, 2008, or systems that increase production by at 25% over their greatest three-year average before June 30, 2008. The incentive payment is also applicable to energy from a qualifying facility placed in service and first producing energy on or after July 1, 2008. The maximum incentive is $100,000 per taxpayer per year. Incentives will be paid beginning on the date the system was placed in service. No incentives will be awarded after June 30, 2018. All claims will be paid from the state's general fund, and total claims may not exceed $2.1 million per fiscal year. As of August 2009, the South Carolina Department of Revenue had distributed $300,000 in payments. The incentive payment for the production of electricity or thermal energy may not be claimed for both electricity and energy produced from the same biomass resource. For the purposes of this incentive, a biomass resource is defined as "wood, wood waste, agricultural waste, animal waste, sewage, landfill gas, and other organic materials, not including fossil fuels."

10. Business Energy Investment Tax Credit a. Note: IRS Notice 2015-4 included new certification requirements for small

wind turbines placed in service after January 26, 2015. Small wind turbines must now meet the performance and quality standards set forth by either the American Wind Energy Association Small Wind Turbine Performance and Safety Standard 9.1-2009 (AWEA), or the International Electrotechnical Commission 61400-1, 61400-12, and 61400-11 (IEC) The federal business energy investment tax credit available under 26 USC § 48 was expanded significantly by the Energy Improvement and Extension Act of 2008 (H.R. 1424), enacted in October 2008. This law extended the duration -- by eight years -- of the existing credits for solar energy, fuel cells and microturbines; increased the credit amount for fuel cells; established new credits for small wind-energy systems, geothermal heat pumps, and combined heat and power (CHP) systems; allowed utilities to use the credits; and allowed taxpayers to take the credit against the alternative minimum tax (AMT), subject to certain limitations. The American Recovery and Reinvestment Act of 2009, enacted in February 2009, further expanded the credit. In general, the following credits

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are available for eligible systems placed in service on or before December 31, 2016*:

1) Solar. The credit is equal to 30% of expenditures, with no maximum credit. Eligible solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. Hybrid solar lighting systems, which use solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight, are eligible. Passive solar systems and solar pool-heating systems are not eligible.

2) Fuel Cells. The credit is equal to 30% of expenditures, with no maximum credit. However, the credit for fuel cells is capped at $1,500 per 0.5 kilowatt (kW) of capacity. Eligible property includes fuel cells with a minimum capacity of 0.5 kW that have an electricity-only generation efficiency of 30% or higher. (Note that the credit for property placed in service before October 4, 2008, is capped at $500 per 0.5 kW.)

3) Small Wind Turbines. The credit is equal to 30% of expenditures, with no maximum credit for small wind turbines placed in service after December 31, 2008. Eligible small wind property includes wind turbines up to 100 kW in capacity. (In general, the maximum credit is $4,000 for eligible property placed in service after October 3, 2008, and before January 1, 2009. The American Recovery and Reinvestment Act of 2009 removed the $4,000 maximum credit limit for small wind turbines.) Small wind turbines must meet the performance and quality standards set forth by either the American Wind Energy Association Small Wind Turbine Performance and Safety Standard 9.1-2009 (AWEA), or the International Electrotechnical Commission 61400-1, 61400-12, and 61400-11 (IEC)

4) Geothermal Systems. The credit is equal to 10% of expenditures, with no maximum credit limit stated. Eligible geothermal energy property includes geothermal heat pumps and equipment used to produce, distribute or use energy derived from a geothermal deposit. For electricity produced by geothermal power, equipment qualifies only up to, but not including, the electric transmission stage. For geothermal heat pumps, this credit applies to eligible property placed in service after October 3, 2008. Note that the credit for geothermal property, with the exception of geothermal heat pumps, has no stated expiration date.

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5) Microturbines. The credit is equal to 10% of expenditures, with no maximum credit limit stated (explicitly). The credit for microturbines is capped at $200 per kW of capacity. Eligible property includes microturbines up to two megawatts (MW) in capacity that have an electricity-only generation efficiency of 26% or higher.

6) Combined Heat and Power (CHP). The credit is equal to 10% of expenditures, with no maximum limit stated. Eligible CHP property generally includes systems up to 50 MW in capacity that exceeds 60% energy efficiency, subject to certain limitations and reductions for large systems. The efficiency requirement does not apply to CHP systems that use biomass for at least 90% of the system's energy source, but the credit may be reduced for less-efficient systems. This credit applies to eligible property placed in service after October 3, 2008.

b. In general, the original use of the equipment must begin with the taxpayer, or the taxpayer must construct the system. The equipment must also meet any performance and quality standards in effect at the time the equipment is acquired. The energy property must be operational in the year in which the credit is first taken. Significantly, the American Recovery and Reinvestment Act of 2009 repealed a previous restriction on the use of the credit for eligible projects also supported by "subsidized energy financing." For projects placed in service after December 31, 2008, this limitation no longer applies. Businesses that receive other incentives are advised to consult with a tax professional regarding how to calculate this federal tax credit. * A number of changes to this credit are scheduled to take effect for systems placed in service after December 31, 2016. The credit for equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat will decrease from 30% to 10%. The credit for geothermal heat pumps, hybrid solar lighting, small wind, fuel cells, microturbines, and combined heat and power systems will expire. The credit amount for equipment, which uses geothermal energy to produce electricity, will remain at 10%.

11. Solar Energy and Small Hydropower Tax Credit a. In South Carolina, taxpayers may claim a credit of 25% of the costs of

purchasing and installing a solar energy system or small hydropower system for heating water, space heating, air cooling, energy-efficient day lighting, heat reclamation, energy-efficient demand response, or the generation of electricity in a building owned by the taxpayer. Effective July 1, 2009, SB 1141 expanded the scope of this credit to include small hydropower systems.

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Only hydropower systems installed after July 1, 2009 are eligible for the tax credit. The maximum credit a taxpayer may take in any one-tax year is $3,500 for each facility or 50% of the taxpayer's tax liability for that taxable year; whichever is less. Unused credit, or credit that exceeds the annual cap, may be carried forward for 10 years. The term "system" includes "all controls, tanks, pumps, heat exchangers, and other equipment used directly and exclusively for the solar-energy system." The term "system" does not include any land or structural elements of the building, such as walls and roofs, or other equipment ordinarily contained in the structure. The Solar Rating and Certification Corporation (SRCC) must certify solar-thermal systems or a comparable entity endorsed by the South Carolina Energy Office to qualify for the credit, unless the system was installed before June 19, 2007.

12. Renewable Electricity Production Tax Credit a. Note: In December 2014, The Tax Increase Prevention Act of 2014 extended

the expiration date for this tax credit to December 31, 2014. Projects that are not under construction prior to January 1, 2015, are ineligible for this credit. In March 2015, IRS Notice 2015-25 extended the Continuous Construction Test and Continuous Efforts Test (used to determine if a project commencing construction before the end of 2014 is eligible for the PTC) by 1 year to January 1, 2017.

b. The federal renewable electricity production tax credit (PTC) is an inflation-adjusted per-kilowatt-hour (kWh) tax credit for electricity generated by qualified energy resources and sold by the taxpayer to an unrelated person during the taxable year. Originally enacted in 1992, the PTC has been renewed and expanded numerous times, most recently by the American Recovery and Reinvestment Act of 2009 (H.R. 1 Div. B, Section 1101 & 1102) in February 2009 (often referred to as "ARRA"), the American Taxpayer Relief Act of 2012 (H.R. 8, Sec. 407) in January 2013, and the Tax Increase Prevention Act of 2014 (H.R. 5771, Sec. 155) in December 2014.

c. The tax credit amount is $0.015 per kWh in 1993 dollars for some technologies and half of that amount for others. The amount is adjusted for inflation by multiplying the tax credit amount by the inflation adjustment factor for the calendar year in which the sale occurs, rounded to the nearest 0.1 cents. The Internal Revenue Service (IRS) publishes the inflation adjustment factor no later than April 1 each year in the Federal Registrar. (For 2014, the inflation adjustment factor used by the IRS is 1.5088.) The table below outlines the credit amount as it applies to different resource types. The table includes changes made by H.R. 8 in January 2013, and the inflation-adjusted credit amounts are current for the 2014 calendar year, as published in the IRS Notice 2014-36.

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Resource Type Credit Amount

Wind $0.023/kWh

Closed-Loop Biomass

$0.023/kWh

Open-Loop Biomass $0.011/kWh

Geothermal Energy $0.023/kWh

Landfill Gas $0.011/kWh

Municipal Solid Waste

$0.011/kWh

Qualified Hydroelectric

$0.011/kWh

Marine and Hydrokinetic

$0.011/kWh

d. The duration of the credit is generally 10 years after the date the facility is

placed in service, but there are two exceptions: 1) open-loop biomass, geothermal, small irrigation hydro, landfill gas,

and municipal solid waste combustion facilities placed into service after October 22, 2004, and before enactment of the Energy Policy Act of 2005, on August 8, 2005, are only eligible for the credit for a 5-year period, and

2) open-loop biomass facilities placed in service before October 22, 2004, are eligible for the 5-year period beginning January 1, 2005.

e. The credit is claimed by completing Form 8835, "Renewable Electricity Production Credit," and Form 3800, "General Business Credit." For more information, contact IRS Telephone Assistance for Businesses at 1-800-829-4933.

f. Recent Legislative Changes: 1) The Tax Increase Prevention Act of 2014 (H.R. 5771, Sec. 155)

extended both the PTC and permission for PTC-eligible facilities to claim the Investment Tax Credit in lieu of the PTC through the end

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of 2014. (Prior to the legislation, the PTC had expired December 31, 2013.) Although not enacted until December 2014, the effective date is January 1, 2014, meaning any qualifying project that commenced construction at any point in 2014 is eligible to claim the PTC.

2) The American Taxpayer Relief Act of 2012 revised the PTC by removing "placed in service" deadlines and replacing them with deadlines that use the commencing of construction as a basis for determining facility eligibility. It also contained language revising the definition of the term "municipal solid waste" to exclude "paper that is commonly recycled and which has been segregated from other solid waste.” The definition change for municipal solid waste applies to electricity produced and sold after the enactment date of the legislation (January 2, 2013) in taxable years ending after that date.

g. To claim the PTC, construction on an eligible project must have “commenced construction” prior to January 1, 2015. The IRS has issued guidance on how it will evaluate whether construction has commenced in IRS Notices 2013-29, 2013-60, 2014-46, and 2015-25 (please see the full text of these notices for complete information on determining the commencing of construction). The guidelines establish two methods—a “physical work” test and a 5% safe harbor (see sections below for details)—to determine when construction has begun on a qualified facility. Meeting the criteria of either method is sufficient to demonstrate that construction has commenced. Both methods require that a taxpayer make continuous progress towards completion once construction has begun by meeting the Continuous Construction Test (to satisfy the Physical Work Test) or the Continuous Efforts Test (to satisfy Safe Harbor). For projects beginning construction before the end of 2014 and placed in service before January 1, 2017, the facility will be considered to satisfy the Continuous Construction Test or the Continuous Efforts Test, regardless of the amount of physical work performed or the amount of costs paid or incurred (Notice 2015-25).

h. The physical work test provides that a taxpayer may establish the beginning of construction by beginning "physical work of a significant nature.” The physical work test is based on the nature of the work performed rather than the cost of the work; if the work performed is of a significant nature, then “there is no fixed minimum amount of work or monetary or percentage threshold required to satisfy the Physical Work Test” (Notice 2014-46). Notice 2013-29 provides several examples of actions that constitute work of a significant nature, including:

1) for a facility that produces electricity from a wind turbine, the beginning of the excavation for the foundation, the setting of anchor

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bolts into the ground, or the pouring of the concrete pads of the foundation;

2) physical work on a custom-designed transformer that steps up the voltage of electricity produced at the facility to the voltage needed for transmission; and

3) beginning construction of roads integral to the activity performed by the facility including onsite roads used for moving materials to be processed (e.g., biomass) and roads for equipment to operate and maintain the facility.

i. Safe Harbor with respect to a facility is demonstrated by showing that 5% or more of the total cost of the facility was paid or incurred before January 1, 2015. If less than 5% of the total cost of the facility was paid or incurred prior to January 1, 2015, Safe Harbor is not fully satisfied; however, if a taxpayer paid or incurred at least 3%, the Safe Harbor may be satisfied and the PTC (or ITC) may be claimed with respect to some, but not all, of the individual facilities comprising the project. Specifically, “a taxpayer may claim the PTC or ITC on any number of individual facilities as long as the total aggregate cost of those individual facilities at the time the project is placed in service is not greater than 20 times the amount the taxpayer paid or incurred before” January 1, 2015 (Notice 2014-46).

13. Energy- Efficient Commercial Building Tax Deduction a. Note: This tax deduction expired at the end of 2013. The Tax Increase

Prevention Act of 2014 retroactively reinstated the tax credit for projects completed in 2014.

b. The federal Energy Policy Act of 2005 established a tax deduction for energy-efficient commercial buildings applicable to qualifying systems and buildings placed in service from January 1, 2006, through December 31, 2007. This deduction was subsequently extended through 2008, and then again through 2013 by Section 303 of the federal Energy Improvement and Extension Act of 2008 (H.R. 1424, Division B), enacted in October 2008. A tax deduction of $1.80 per square foot is available to owners of new or existing buildings who install (1) interior lighting; (2) building envelope, or (3) heating, cooling, ventilation, or hot water systems that reduce the building’s total energy and power cost by 50% or more in comparison to a building meeting minimum requirements set by ASHRAE Standard 90.1-2001. Energy savings must be calculated using qualified computer software approved by the IRS. Click here for the list of approved software. Deductions of $0.60 per square foot are available to owners of buildings in which individual lighting, building envelope, or heating and cooling systems meet target levels that would reasonably contribute to an overall building savings of 50% if additional

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systems were installed. The deductions are available primarily to building owners, although tenants may be eligible if they make construction expenditures. In the case of energy efficient systems installed on or in government property, tax deductions will be awarded to the person primarily responsible for the system's design. Deductions are taken in the year when construction is completed. The IRS released interim guidance (IRS Notice 2006-52) in June 2006 to establish a process to allow taxpayers to obtain a certification that the property satisfies the energy efficiency requirements contained in the statute. IRS Notice 2008-40 was issued in March of 2008 to further clarify the rules. NREL published a report (NREL/TP-550-40228) in February 2007, which provides guidelines for the modeling and inspection of energy savings required by the statute.

14. Renewable Energy Manufacturing Tax Credit a. South Carolina offers a ten percent income tax credit to the manufacturers of

renewable energy operations* for tax years 2010 through 2015. In order to qualify, a business must:

1) manufacture renewable energy systems and components in South Carolina for solar, wind, geothermal, or other renewable energy uses

2) invest a minimum of $50 million in a Tier IV county, $100 million in a Tier III county, $150 million in a Tier II county, and at least $200 million in a Tier I county in new qualifying plant and equipment expenditures the year the tax credit is claimed

3) create one full-time job that pays 125% of the state's annual median wage for every $1 million in capital investment qualifying for the credit

4) qualifying jobs must pay at least one hundred twenty-five percent of this State's average annual median wage as defined by the Department of Commerce

b. A taxpayer's total credit cannot exceed $500,000 for any year and $5 million total for all years. Unused credits may be carried forward for fifteen years after the tax year in which a qualified expenditure was made. The tax credit is nonrefundable. Applicants must file a request for the credit to the State Energy Office (SEO) by January 31 for expenses incurred the previous tax year. Qualifying expenditures** must be certified by the SEO. The SEO is required to notify applicant of approval and approved credit amount by the following March. Tax credit cannot be combined with any other state tax incentive.

c. *"Renewable energy operations" are limited to manufacturers of systems and components that are used or useful in manufacturing renewable energy equipment for the generation, storage, testing and research and development,

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and transmission or distribution of electricity from renewable sources, including specialized packaging for the renewable energy equipment manufactured at the facility.

d. **"Qualifying investment" means investment in land, buildings, machinery, and fixtures for expansion of an existing facility or establishment of a new facility in South Carolina. Qualifying investment does not include relocating an existing facility in South Carolina to another location in the State without additional capital investment.

15. York Electric Cooperative- Dual Fuel Heat Pump Rebate Program a. York Electric Cooperative, Inc. (YEC) offers a $200 rebate to members who

install a dual fuel heat pump in homes or businesses. The rebates are for primary residences, commercial, and industrial locations. Rebates apply to both existing and new construction. The incentive is for the property owner only, meaning that renters/tenants are not eligible. For owners of manufactured homes to receive incentives they must own the home and the property on which it is located. Rebates are available for up to two systems per household.

16. Santee Cooper Commercial Energy Efficiency Rebate Program a. Santee Cooper, through its Reduce The Use program, provides rebates to

commercial customers for the purchase and installation of energy efficient equipment and measures. Rebates are available on refrigeration, lighting, lighting controls and sensors, air conditioners, heat pumps, chillers, variable frequency drives for air handlers, envelope upgrades, and custom measures. All equipment requirements specified by Santee Cooper must be met in order to qualify for incentives. Contact the utility for equipment requirements before purchasing items. Certain rebates are offered based on the amount of electricity saved or avoided, while others are offered on a flat rate. Additionally, Santee Cooper provides a variety of rebates and financing options to residential customers for energy efficient and sustainable improvements.

17. Duke Energy- Non-Residential Energy Efficiency Rebate a. Duke Energy’s Smart $aver Incentive program offers rebates to non-

residential customers to install energy efficient equipment in their facilities. All Duke Energy South Carolina nonresidential electric customers are eligible, except those that have elected to opt out of the Energy Efficiency Rider. Rebates are available for a wide range of equipment including lighting, heating and cooling equipment, chillers and thermal storage units, motors, pumps, VFDs, process equipment, and food service equipment. All equipment must meet certain energy efficiency standards stated on the program web site. To receive the rebates, customers should submit a completed application

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within 90 days after the equipment is installed and operational. A list of frequently asked questions and the program application forms can be found on the program web site. Custom applications for up to 50% of cost on any electricity saving device can be sent to CustomIncentives@duke-energy.com. Three levels of energy assessments are available for commercial customers: online, over the phone, and on-site visits by an energy professional providing a report with paybacks. The on-site visits require a fee which can be recouped within the Smart $aver Incentives program; to begin, customers can contact businessservicecenter@duke-energy.com. Demand response programs are also available, providing rewards and load curtailment via a dedicated web portal for each commercial customer.

18. SCE&G- Commercial EnergyWise Program a. South Carolina Electric and Gas (SCE&G) provides EnergyWise efficiency

incentives to any non-residential customers in its service territory, which have not opted out of the DSM programs by notifying SCE&G in writing through the Opt-Out form. Incentives cover retrofits, installing high-efficiency equipment during new construction, and replacing old or broken equipment such as high-efficiency lighting, LED traffic signals, HVAC systems and variable frequency drives on HVAC systems. Commercial food service equipment is also eligible for incentives under the program. Rebate payments will only be made to the SCE&G electric account holder in the SCE&G territory.

19. Progress Energy Carolinas- Commercial Energy Efficiency Program a. Progress Energy provides rebates for energy efficiency measures in new

construction or retrofits, as well as Technical Assistance for feasibility/energy studies to commercial, industrial and government organizations. Incentives are based on prescriptive rebate amounts listed above or custom amounts based on annual kilowatt-hours (kWh) saved. Prescriptive rebate amounts are available on the program application forms on the Progress Energy web site listed above. A Custom Whole Building incentive for new construction modeled 10% beyond applicable building code can receive $0.09 per annual kWh saved up to $0.14 per annual kWh saved for designs exceeding 20% beyond code. New buildings greater than 20,000 square feet and designed with a projected first-year electrical savings of at least 15% beyond the applicable building code can receive a design incentive of $.05 per kWh of projected first year savings, up to a maximum of $50,000, or a Building Energy Modeling Incentive up to $20,000, not to exceed the total cost of the modeling service., For retrofits to buildings that use over 500,000 kWh, customers can receive up to 50% of the cost of an energy or feasibility study or retro-commissioning up to $20,000 for a facility every three years. Once a

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project is identified, a pre-approval incentive application should be submitted to Progress Energy. Pre-approval is required for some lighting projects and all custom projects, and technical assistance and is strongly encouraged for all projects to reserve funding. Progress Energy should receive a final application and all required documentation within 90 days of project completion.

20. Santee cooper- Business Custom Rebates a. Santee Cooper has developed a Business Custom Rebate as part of their

Reduce the Use: Business Prescriptive Rebate Program, which was designed to reduce a business's overall electricity use. The Business Custom Rebate is a one-time rebate based on $0.10 for every kWh of verified first-year energy savings, up to $200,000 per project. Energy-saving measures not already covered by one of the Reduce the Use: Business Prescriptive Rebates for lighting, HVAC, building envelope or commercial refrigeration may qualify for a Custom Rebate. Contact Santee Cooper for more information on this program.

Georgia (back to top) 1. Business Energy Investment Tax Credit

a. Note: IRS Notice 2015-4 included new certification requirements for small wind turbines placed in service after January 26, 2015. Small wind turbines must now meet the performance and quality standards set forth by either the American Wind Energy Association Small Wind Turbine Performance and Safety Standard 9.1-2009 (AWEA), or the International Electrotechnical Commission 61400-1, 61400-12, and 61400-11 (IEC)

b. The federal business energy investment tax credit available under 26 USC § 48 was expanded significantly by the Energy Improvement and Extension Act of 2008 (H.R. 1424), enacted in October 2008. This law extended the duration -- by eight years -- of the existing credits for solar energy, fuel cells and microturbines; increased the credit amount for fuel cells; established new credits for small wind-energy systems, geothermal heat pumps, and combined heat and power (CHP) systems; allowed utilities to use the credits; and allowed taxpayers to take the credit against the alternative minimum tax (AMT), subject to certain limitations. The American Recovery and Reinvestment Act of 2009, enacted in February 2009, further expanded the credit. In general, the following credits are available for eligible systems placed in service on or before December 31, 2016*:

i. Solar. The credit is equal to 30% of expenditures, with no maximum credit. Eligible solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. Hybrid

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solar lighting systems, which use solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight, are eligible. Passive solar systems and solar pool-heating systems are not eligible.

ii. Fuel Cells. The credit is equal to 30% of expenditures, with no maximum credit. However, the credit for fuel cells is capped at $1,500 per 0.5 kilowatt (kW) of capacity. Eligible property includes fuel cells with a minimum capacity of 0.5 kW that have an electricity-only generation efficiency of 30% or higher. (Note that the credit for property placed in service before October 4, 2008, is capped at $500 per 0.5 kW.)

iii. Small Wind Turbines. The credit is equal to 30% of expenditures, with no maximum credit for small wind turbines placed in service after December 31, 2008. Eligible small wind property includes wind turbines up to 100 kW in capacity. (In general, the maximum credit is $4,000 for eligible property placed in service after October 3, 2008, and before January 1, 2009. The American Recovery and Reinvestment Act of 2009 removed the $4,000 maximum credit limit for small wind turbines.) Small wind turbines must meet the performance and quality standards set forth by either the American Wind Energy Association Small Wind Turbine Performance and Safety Standard 9.1-2009 (AWEA), or the International Electrotechnical Commission 61400-1, 61400-12, and 61400-11 (IEC)

iv. Geothermal Systems. The credit is equal to 10% of expenditures, with no maximum credit limit stated. Eligible geothermal energy property includes geothermal heat pumps and equipment used to produce, distribute or use energy derived from a geothermal deposit. For electricity produced by geothermal power, equipment qualifies only up to, but not including, the electric transmission stage. For geothermal heat pumps, this credit applies to eligible property placed in service after October 3, 2008. Note that the credit for geothermal property, with the exception of geothermal heat pumps, has no stated expiration date.

v. Microturbines. The credit is equal to 10% of expenditures, with no maximum credit limit stated (explicitly). The credit for microturbines is capped at $200 per kW of capacity. Eligible property includes microturbines up to two megawatts (MW) in capacity that have an electricity-only generation efficiency of 26% or higher.

vi. Combined Heat and Power (CHP). The credit is equal to 10% of expenditures, with no maximum limit stated. Eligible CHP property generally includes systems up to 50 MW in capacity that exceeds 60%

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energy efficiency, subject to certain limitations and reductions for large systems. The efficiency requirement does not apply to CHP systems that use biomass for at least 90% of the system's energy source, but the credit may be reduced for less-efficient systems. This credit applies to eligible property placed in service after October 3, 2008.

c. In general, the original use of the equipment must begin with the taxpayer, or the taxpayer must construct the system. The equipment must also meet any performance and quality standards in effect at the time the equipment is acquired. The energy property must be operational in the year in which the credit is first taken. Significantly, the American Recovery and Reinvestment Act of 2009 repealed a previous restriction on the use of the credit for eligible projects also supported by "subsidized energy financing." For projects placed in service after December 31, 2008, this limitation no longer applies. Businesses that receive other incentives are advised to consult with a tax professional regarding how to calculate this federal tax credit.

d. * A number of changes to this credit are scheduled to take effect for systems placed in service after December 31, 2016. The credit for equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat will decrease from 30% to 10%. The credit for geothermal heat pumps, hybrid solar lighting, small wind, fuel cells, microturbines, and combined heat and power systems will expire. The credit amount for equipment, which uses geothermal energy to produce electricity, will remain at 10%.

2. Renewable Electricity Production Tax Credit a. Note: In December 2014, The Tax Increase Prevention Act of 2014 extended

the expiration date for this tax credit to December 31, 2014. Projects that are not under construction prior to January 1, 2015, are ineligible for this credit. In March 2015, IRS Notice 2015-25 extended the Continuous Construction Test and Continuous Efforts Test (used to determine if a project commencing construction before the end of 2014 is eligible for the PTC) by 1 year to January 1, 2017.

b. The federal renewable electricity production tax credit (PTC) is an inflation-adjusted per-kilowatt-hour (kWh) tax credit for electricity generated by qualified energy resources and sold by the taxpayer to an unrelated person during the taxable year. Originally enacted in 1992, the PTC has been renewed and expanded numerous times, most recently by the American Recovery and Reinvestment Act of 2009 (H.R. 1 Div. B, Section 1101 & 1102) in February 2009 (often referred to as "ARRA"), the American Taxpayer

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Relief Act of 2012 (H.R. 8, Sec. 407) in January 2013, and the Tax Increase Prevention Act of 2014 (H.R. 5771, Sec. 155) in December 2014.

c. The tax credit amount is $0.015 per kWh in 1993 dollars for some technologies and half of that amount for others. The amount is adjusted for inflation by multiplying the tax credit amount by the inflation adjustment factor for the calendar year in which the sale occurs, rounded to the nearest 0.1 cents. The Internal Revenue Service (IRS) publishes the inflation adjustment factor no later than April 1 each year in the Federal Registrar. (For 2014, the inflation adjustment factor used by the IRS is 1.5088.) The table below outlines the credit amount as it applies to different resource types. The table includes changes made by H.R. 8 in January 2013, and the inflation-adjusted credit amounts are current for the 2014 calendar year, as published in the IRS Notice 2014-36.

Resource Type Credit Amount

Wind $0.023/kWh

Closed-Loop Biomass

$0.023/kWh

Open-Loop Biomass $0.011/kWh

Geothermal Energy $0.023/kWh

Landfill Gas $0.011/kWh

Municipal Solid Waste

$0.011/kWh

Qualified Hydroelectric

$0.011/kWh

Marine and Hydrokinetic

$0.011/kWh

d. The duration of the credit is generally 10 years after the date the facility is placed in service, but there are two exceptions:

i. open-loop biomass, geothermal, small irrigation hydro, landfill gas, and municipal solid waste combustion facilities placed into service

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after October 22, 2004, and before enactment of the Energy Policy Act of 2005, on August 8, 2005, are only eligible for the credit for a 5-year period, and

ii. open-loop biomass facilities placed in service before October 22, 2004, are eligible for the 5-year period beginning January 1, 2005.

e. The credit is claimed by completing Form 8835, "Renewable Electricity Production Credit," and Form 3800, "General Business Credit." For more information, contact IRS Telephone Assistance for Businesses at 1-800-829-4933.

f. The Tax Increase Prevention Act of 2014 (H.R. 5771, Sec. 155) extended both the PTC and permission for PTC-eligible facilities to claim the Investment Tax Credit in lieu of the PTC through the end of 2014. (Prior to the legislation, the PTC had expired December 31, 2013.) Although not enacted until December 2014, the effective date is January 1, 2014, meaning any qualifying project that commenced construction at any point in 2014 is eligible to claim the PTC. The American Taxpayer Relief Act of 2012 revised the PTC by removing "placed in service" deadlines and replacing them with deadlines that use the commencing of construction as a basis for determining facility eligibility. It also contained language revising the definition of the term "municipal solid waste" to exclude "paper that is commonly recycled and which has been segregated from other solid waste.” The definition change for municipal solid waste applies to electricity produced and sold after the enactment date of the legislation (January 2, 2013) in taxable years ending after that date.

g. To claim the PTC, construction on an eligible project must have “commenced construction” prior to January 1, 2015. The IRS has issued guidance on how it will evaluate whether construction has commenced in IRS Notices 2013-29, 2013-60, 2014-46, and 2015-25 (please see the full text of these notices for complete information on determining the commencing of construction). The guidelines establish two methods—a “physical work” test and a 5% safe harbor (see sections below for details)—to determine when construction has begun on a qualified facility. Meeting the criteria of either method is sufficient to demonstrate that construction has commenced. Both methods require that a taxpayer make continuous progress towards completion once construction has begun by meeting the Continuous Construction Test (to satisfy the Physical Work Test) or the Continuous Efforts Test (to satisfy Safe Harbor). For projects beginning construction before the end of 2014 and placed in service before January 1, 2017, the facility will be considered to satisfy the Continuous Construction Test or the Continuous Efforts Test, regardless of

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the amount of physical work performed or the amount of costs paid or incurred (Notice 2015-25).

h. The physical work test provides that a taxpayer may establish the beginning of construction by beginning "physical work of a significant nature.” The physical work test is based on the nature of the work performed rather than the cost of the work; if the work performed is of a significant nature, then “there is no fixed minimum amount of work or monetary or percentage threshold required to satisfy the Physical Work Test” (Notice 2014-46).

i. Notice 2013-29 provides several examples of actions that constitute work of a significant nature, including:

i. for a facility that produces electricity from a wind turbine, the beginning of the excavation for the foundation, the setting of anchor bolts into the ground, or the pouring of the concrete pads of the foundation;

ii. physical work on a custom-designed transformer that steps up the voltage of electricity produced at the facility to the voltage needed for transmission; and

iii. beginning construction of roads integral to the activity performed by the facility including onsite roads used for moving materials to be processed (e.g., biomass) and roads for equipment to operate and maintain the facility.

j. Safe Harbor with respect to a facility is demonstrated by showing that 5% or more of the total cost of the facility was paid or incurred before January 1, 2015. If less than 5% of the total cost of the facility was paid or incurred prior to January 1, 2015, Safe Harbor is not fully satisfied; however, if a taxpayer paid or incurred at least 3%, the Safe Harbor may be satisfied and the PTC (or ITC) may be claimed with respect to some, but not all, of the individual facilities comprising the project. Specifically, “a taxpayer may claim the PTC or ITC on any number of individual facilities as long as the total aggregate cost of those individual facilities at the time the project is placed in service is not greater than 20 times the amount the taxpayer paid or incurred before” January 1, 2015 (Notice 2014-46).

3. USDA- Rural Energy for America Program a. The Repowering Assistance Program provides payments to eligible

biorefineries to replace fossil fuels used to produce heat or power to operate the biorefineries with renewable biomass. Reimbursement payments are provided to offset a portion of the costs associated with the conversion of existing fossil fuel systems to renewable biomass fuel systems. The reimbursement amounts vary and are determined by the availability of funds, the project scope, and the ability of the proposed project to meet all the

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scoring criteria. In particular reimbursement amounts are calculated by the percentage reduction in fossil fuel used by the biorefinery, the quantity of fossil fuels replaced by a renewable biomass system, and the cost effectiveness of the renewable biomass system. The program will provide reimbursement payments for eligible project costs of the renewable biomass system during the construction phase of the repowering project. Up to 90% of the funds can be utilized during project construction, with the remaining 10% made upon demonstration of successful completion of the project. A maximum of 50% of the total project costs can be reimbursed, as long as amount does not exceed the maximum award for the fiscal year. Eligible technologies may include, but are not limited to, anaerobic digesters, processed steam, biomass boilers, or combined heat and power technologies (CHP). Applicants must demonstrate, at the time of application, that the proposed site has direct access to biomass or third party commitments to supply biomass for the repowering project for at least three years. Payments are made for eligible post-application costs incurred during the construction phase of the repowering project. Congress allocated $35 million for FY 2009, in addition to up to $15 million in discretionary funds annually beginning in FY 2009. The American Taxpayer Relief Act of 2012 extended discretionary funding through FY 2013.

4. Modified Accelerated Commercial Building Tax Deduction a. Note: Sec. 125 of H.R. 5771, the Tax Increase Prevention Act of 2014,

extended the "placed in service" date of the 50% bonus depreciation provision originally included in the American Recovery and Reinvestment Act of 2009 to December 31, 2014, and thus retroactively through the 2014 tax year.

b. Under the federal Modified Accelerated Cost-Recovery System (MACRS), businesses may recover investments in certain property through depreciation deductions. The MACRS establishes a set of class lives for various types of property, ranging from three to 50 years, over which the property may be depreciated. A number of renewable energy technologies are classified as five-year property (26 USC § 168(e)(3)(B)(vi)) under the MACRS, which refers to 26 USC § 48(a)(3)(A), often known as the energy investment tax credit or ITC to define eligible property. Such property currently includes*:

i. a variety of solar-electric and solar-thermal technologies ii. fuel cells and microturbines

iii. geothermal electric iv. direct-use geothermal and geothermal heat pumps v. small wind (100 kW or less)

vi. combined heat and power (CHP)

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vii. the provision which defines ITC technologies as eligible also adds the general term "wind" as an eligible technology, extending the five-year schedule to large wind facilities as well.

c. In addition, for certain other types of renewable energy property, such as biomass or marine and hydrokinetic property, the MACRS property class life is seven years. Eligible biomass property generally includes assets used in the conversion of biomass to heat or to a solid, liquid or gaseous fuel, and to equipment and structures used to receive, handle, collect and process biomass in a waterwall, combustion system, or refuse-derived fuel system to create hot water, gas, steam and electricity. Marine and hydrokinetic property includes facilities that utilize waves, tides, currents, free-flowing water, or differentials in ocean temperature to generate energy. It does not include traditional hydropower that uses dams, diversionary structures, or impoundments. The 5-year schedule for most types of solar, geothermal, and wind property has been in place since 1986. The federal Energy Policy Act of 2005 (EPAct 2005) classified fuel cells, microturbines and solar hybrid lighting technologies as five-year property as well by adding them to § 48(a)(3)(A). This section was further expanded in October 2008 by the addition of geothermal heat pumps, combined heat and power, and small wind under The Energy Improvement and Extension Act of 2008.

d. The federal Economic Stimulus Act of 2008, enacted in February 2008, included a 50% first-year bonus depreciation (26 USC § 168(k)) provision for eligible renewable-energy systems acquired and placed in service in 2008. The allowance for bonus depreciation has since been extended and modified several times since the original enactment, most recently in December 2014 by the Tax Increase Prevention Act Of 2014 (H.R. 5771, Sec. 125). This legislation extended the "in-service" provision for qualifying property through to December 31, 2014, and thus also did so retroactively for property placed in service after December 31, 2013, through to enactment.

e. The 50% first-year bonus depreciation provision enacted in 2008 was extended (retroactively for the entire 2009 tax year) under the same terms by the American Recovery and Reinvestment Act of 2009 (H.R. 1), enacted in February 2009. It was renewed again in September 2010 (retroactively for the entire 2010 tax year) by the Small Business Jobs Act of 2010 (H.R. 5297). In December 2010 the provision for bonus depreciation was amended and extended yet again by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (H.R. 4853). Under these amendments, eligible property placed in service after September 8, 2010 and before January 1, 2012 was permitted to qualify for 100% first-year bonus depreciation. The December 2010 amendments also permitted bonus

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depreciation to be claimed for property placed in service during 2012, but reverted the allowable amount from 100% to 50% of the eligible basis. The 50% first-year bonus depreciation allowance was further extended for property placed in service during 2013 by the American Taxpayer Relief Act of 2012 (H.R. 8, Sec. 331) in January 2013. As noted above, the Tax Increase Prevention Act Of 2014 (H.R. 5771, Sec. 125), extended these provisions through to December 31, 2014, and thus retroactively for the 2014 tax year.

f. *Note that the definitions of eligible technologies included in this entry are somewhat simplified versions of those contained in tax code, which often contain additional caveats, restrictions, and modifications. Those interested in this incentive should review the relevant sections of the code in detail prior to making business decisions.

5. USDA- Rural Energy for America Program (Energy Audit and Renewable Energy Development Assistance Program)

a. Note: The U.S. Department of Agriculture's Rural Development periodically issues Notices of Solicitation of Applications for the Rural Energy for America Program (REAP) in the Federal Registry. The most recent solicitation for the REAP program was on December 29th, 2014 and can be viewed in the Federal Registry here.

b. The Renewable Energy for America Program (REAP) Energy Audit and Renewable Energy Development Assistance Program (EA/REDA) provides assistance to agricultural producers and rural small businesses for energy audits and renewable energy technical assistance including renewable energy site assessments. Applicants must submit separate applications for assistance, limited to one energy audit and one REDA per fiscal year. The maximum aggregate amount of an energy audit and REDA grant in a Federal fiscal year* is $100,000. In 2015, $2 Million in EA/REDA grant funding is available. Eligible project costs for eligible applicants includes salaries directly related to the project, travel expenses directly related to conducting energy audits or renewable energy development assistance, office supplies (e.g., paper, pens, file folders), administrative expenses, up to a maximum of 5 percent of the grant, which include but are not limited to utilities, office space, operation expenses of office and other project related equipment. Land grant colleges and universities are referred to above as schools, public universities, and institutions; K-12 schools are not eligible for this grant.

c. The 2014 Agricultural Act (2014 Farm Bill) authorized the Rural Energy for America Program with $50 Million in mandatory funding each fiscal year. USDA overhauled the Rural Energy for America Program although the core program remains largely the same. One major change includes a 3 tiered application structure including 1) total project costs of $80,000 or less, 2) total

26

project costs more than $80,000 but less than $200,000, and, 3) total project costs of $200,000 or greater. Grant applications of $20,000 or less will compete in 5 competitions (Congress required 20% of funding to be used for small grants of $20,000 or less). The Food, Conservation, and Energy Act of 2008 (H.R. 2419), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program,* into the Rural Energy for America Program (REAP). Similar to its predecessor, REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the program in the following amounts: $55 million for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, up to $25 million in discretionary funding may be issued each year. The American Taxpayer Relief Act of 2012 (H.R. 8) extended discretionary funding for FY 2013.

6. USDA- Rural Energy for America Program (Grants) a. Note: The U.S. Department of Agriculture's Rural Development issues

periodic Notices of Solicitation of Applications for the Rural Energy for America Program (REAP) in the Federal Registry. The most recent solicitation for the REAP program was on May 5th, 2014 and can be viewed in the Federal Registry here. The next Notice of Funding Availability will be published in the Federal Registry and on the USDA website here. Notably, the 2014 Farm Bill removed authority for the USDA to fund REAP feasibility studies with REAP grants.

b. The Rural Energy for America Program (REAP) provides financial assistance to agricultural producers and rural small businesses in rural America to purchase, install, and construct renewable energy systems, make energy efficiency improvements to non-residential buildings and facilities, use renewable technologies that reduce energy consumption, and participate in energy audits and renewable energy development assistance. Renewable energy projects for the Renewable Energy Systems and Energy Efficiency Improvement Guaranteed Loan and Grant Program include wind, solar, biomass and geothermal, and hydrogen derived from biomass or water using wind, solar, or geothermal energy sources. These grants are limited to 25% of a proposed project's cost, and a loan guarantee may not exceed $25 million. The combined amount of a grant and loan guarantee must be at least $5,000 (with the grant portion at least $1,500) and may not exceed 75% of the

27

project’s cost. In general, a minimum of 20% of the funds available for these incentives will be dedicated to grants of $20,000 or less. For more information on grant, loan guarantees, loan financing, and opportunities for combinations thereof, visit the USDA website. In 2014, $12.3 million in grants and $56.4 million in loans were awarded. For a complete list of 2014 projects.

c. Grants and loans are generally available to state government entities, local governments, tribal governments, land-grant colleges and universities**, rural electric cooperatives and public power entities, and other entities, as determined by the USDA. To be eligible for REAP grants and loans, an applicant must have a satisfactory revenue stream and be in control the budget, operations, and maintenance of a project for the entire duration of the loan or grant. Rural small businesses must be located in rural areas, but agricultural producers may be located in non-rural areas. Eligible project costs include purchasing energy efficiency improvements or a renewable energy system, energy audits or assessments, permitting and licensing fees, and business plans and retrofitting. For new construction the replacement of older equipment with more efficient equipment may be eligible as a project cost only when a new facility is planned to be more efficient and similarly sized than the older facility. Working capital and land acquisition are only eligible for loan guarantees. Regional rural energy coordinators provide loan and grant applications upon request.

d. The Food, Conservation, and Energy Act of 2008 (H.R. 2419), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program,* into the Rural Energy for America Program (REAP). Similar to its predecessor, the REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the new program in the following amounts: $55 million for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, up to $25 million in discretionary funding may be issued each year. The American Taxpayer Relief Act of 2012 (H.R. 8) extended discretionary funding for FY 2013. The 2014 Farm Bill reauthorized the USDA to offer these programs and removed the mandate to offer grants for feasibility studies.

e. * The Renewable Energy Systems and Energy Efficiency Improvements Program was created by the USDA pursuant to Section 9006 of the 2002 federal Farm Security and Rural Investment Act of 2002. Funding in the

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amount of $23 million per year was appropriated for each fiscal year from FY 2003-2007. In March 2008, the USDA announced that it would accept $220.9 million in applications for grants, loan guarantees, and loan/grant combination packages under the Renewable Energy Systems and Energy Efficiency Improvements Program. The application deadline was June 16, 2008.

f. **Land grant colleges and universities are referred to above as "schools" and "institutions". It is important to note that K-12 schools are not eligible for this grant.

7. USDA- Rural Energy for America Program (Loan Guarantees) a. Note: The U.S. Department of Agriculture's Rural Development issues

periodic Notices of Solicitation of Applications for the Rural Energy for America Program (REAP) in the Federal Registry. The most recent solicitation for the REAP program was on May 5th, 2014 and can be viewed in the Federal Registry here. The next Notice of Funding Availability will be published in the Federal Registry and on the USDA website here. Notably, the 2014 Farm Bill removed authority for the USDA to fund REAP feasibility studies with REAP grants.

b. The Rural Energy for America Program (REAP) provides financial assistance to agricultural producers and rural small businesses in rural America to purchase, install, and construct renewable energy systems, make energy efficiency improvements to non-residential buildings and facilities, use renewable technologies that reduce energy consumption, and participate in energy audits and renewable energy development assistance. Renewable energy projects for the Renewable Energy Systems and Energy Efficiency Improvement Guaranteed Loan and Grant Program include wind, solar, biomass and geothermal, and hydrogen derived from biomass or water using wind, solar, or geothermal energy sources. These grants are limited to 25% of a proposed project's cost, and a loan guarantee may not exceed $25 million. The combined amount of a grant and loan guarantee must be at least $5,000 (with the grant portion at least $1,500) and may not exceed 75% of the project’s cost. In general, a minimum of 20% of the funds available for these incentives will be dedicated to grants of $20,000 or less. For more information on grant, loan guarantees, loan financing, and opportunities for combinations thereof, visit the USDA website. In 2014, $12.3 million in grants and $56.4 million in loans was awarded. For a complete list of 2014 projects, click here.

c. Grants and loans are generally available to state government entities, local governments, tribal governments, land-grant colleges and universities**, rural electric cooperatives and public power entities, and other entities, as determined by the USDA. To be eligible for REAP grants and loans, an

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applicant must have a satisfactory revenue stream and be in control the budget, operations, and maintenance of a project for the entire duration of the loan or grant. Rural small businesses must be located in rural areas, but agricultural producers may be located in non-rural areas. Eligible project costs include purchasing energy efficiency improvements or a renewable energy system, energy audits or assessments, permitting and licensing fees, and business plans and retrofitting. For new construction the replacement of older equipment with more efficient equipment may be eligible as a project cost only when a new facility is planned to be more efficient and similarly sized than the older facility. Working capital and land acquisition are only eligible for loan guarantees. Regional rural energy coordinators provide loan and grant applications upon request.

d. The Food, Conservation, and Energy Act of 2008 (H.R. 2419), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program,* into the Rural Energy for America Program (REAP). Similar to its predecessor, the REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the new program in the following amounts: $55 million for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, up to $25 million in discretionary funding may be issued each year. The American Taxpayer Relief Act of 2012 (H.R. 8) extended discretionary funding for FY 2013. The 2014 Farm Bill reauthorized the USDA to offer these programs and removed the mandate to offer grants for feasibility studies.

e. * The Renewable Energy Systems and Energy Efficiency Improvements

Program was created by the USDA pursuant to Section 9006 of the 2002 federal Farm Security and Rural Investment Act of 2002. Funding in the amount of $23 million per year was appropriated for each fiscal year from FY 2003-2007. In March 2008, the USDA announced that it would accept $220.9 million in applications for grants, loan guarantees, and loan/grant combination packages under the Renewable Energy Systems and Energy Efficiency Improvements Program. The application deadline was June 16, 2008.

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f. **Land grant colleges and universities are referred to above as "schools" and "institutions". It is important to note that K-12 schools are not eligible for this grant.

8. USDA- High Energy Cost Grant Program

a. NOTE: The most recent solicitation for this program closed August 1, 2014. Please check the program website for information on future solicitations.

b. The U.S. Department of Agriculture (USDA) offers an ongoing grant program for the improvement of energy generation, transmission, and distribution facilities in rural communities. This program began in 2000. Eligibility is limited to projects in communities that have average home energy costs at least 275% above the national average. Individuals, non-profits, commercial entities, state and local governments (including any agency or instrumentality thereof), and tribal governments are eligible for this grant. Individuals must work on a project that will benefit the community in order to qualify. Under the most recent solicitation for projects, a total of $7 million was available for qualifying projects. Under this solicitation grants ranging from $50,000 to $3 million were available for a variety of activities, including:

i. Electric generation, transmission, and distribution facilities; ii. Natural gas or petroleum storage or distribution facilities;

iii. Renewable energy facilities used for on-grid or off-grid electric power generation, water or space heating, or process heating and power;

iv. Backup up or emergency power generation or energy storage equipment; and

v. Weatherization of residential and community property, or other energy efficiency or conservation programs.

c. This grant program is not limited to renewable energy or energy conservation and efficiency measures, but these measures are eligible for this grant program.

9. Georgia Green Loans Save and Sustain Program a. Georgia Green Loans, a non-profit microlending agency, offers funding to

"green" businesses using funding from a Georgia Environmental Finance Authority (GEFA) grant. The GEFA grant is based on State Energy Program funding from The American Recovery and Reinvestment Act of 2009 (ARRA). Georgia Green Loans is using this funding for the "Save & Sustain" program to subsidize commercial energy audits for Georgia small businesses and commercial property owners, and to provide low-interest loans for energy-efficient improvements. Georgia Green Loans will cover most of the costs for commercial energy audits through a select group of energy auditing partners, allowing businesses to inform decisions on energy efficiency

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improvements. Loan amounts range from $500 to $35,000 and loans may be used for a variety of technologies, including HVAC systems, insulation, and Energy Star appliances. The maximum term of the loan is five years. Loans are available to renewable energy and energy efficiency businesses, in addition to other types of "green" businesses.

10. Biomass Sales and Use Tax Exemption a. Georgia enacted legislation in April 2006 (HB 1018) creating an exemption

for biomass materials from the state's sales and use taxes. The term "biomass material" is defined as "organic matter, excluding fossil fuels, including agricultural crops, plants, trees, wood, wood wastes and residues, sawmill waste, sawdust, wood chips, bark chips, and forest thinning, harvesting, or clearing residues; wood waste from pallets or other wood demolition debris; peanut shells; pecan shells; cotton plants; corn stalks; and plant matter, including aquatic plants, grasses, stalks, vegetation, and residues, including hulls, shells, or cellulose-containing fibers." To qualify for the exemption, the biomass material must be utilized in the production of energy, including the production of electricity, steam, or both electricity and steam. Pellets and fuels derived from biomass are generally eligible. Energy produced from biomass material must be sold.

11. TVA- Mid-Sized Renewable Standard Offer Program a. The Tennessee Valley Authority (TVA) now compliments the small

generation Green Power Providers Program by providing incentives for mid-sized renewable energy generators between 50kW and 20MW to enter into long-term price contracts. The goal for total production from all participants is 100MW, with no more than 50MW from any one renewable technology. The Renewable Standard Offer program also includes Solar Solution Initiative program that offers additional financial incentives for Solar Photovoltaic (PV) projects. TVA bases the standard offer for customer generators off of a seasonal time-of-day averages chart, which sets base prices for the term of the contract. For projects approved after January 2015, prices increase at a rate of 5% per year beginning in 2016 and may be changed with 90 days’ notice by TVA (no more than 1% per year). For 2015, the average price is expected range between $0.029/kWh during low demand periods to $0.051/kWh during high demand periods. Learn more about pricing here. Generation is recorded monthly through metering equipment installed by TVA and paid for by the participant. All energy output, Renewable Energy Credits (RECs), or other environmental attributes from installations under this program belong to TVA, and all marketing of the program should indicate that TVA (not the power seller) consumes all of the energy from these renewable energy projects. Biomass, Wind, or Photovoltaics can be interconnected

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through either TVA's transmission system or partners' distribution systems under 10, 15, or 20 year contracts. Biomass should co-fire 50% or more with the fuel consumption content approved by TVA and separately metered. The remainder of the biomass production can be purchased through the TVA's Dispersed Power Production Program. Before approval, the seller must provide TVA with project financing arrangements, interconnection agreements between the seller and either TVA or a Distributor, and TVA metering installation plans at an environmentally acceptable location. The participating power producer is responsible for interconnection, performance assurance, and application costs. TVA, or an approved third party, will also perform an environmental review at the seller’s cost.

12. Sawnee EMC- Commercial Energy Efficiency Rebate Program a. Sawnee EMC provides a variety of rebates for commercial customers who

wish to upgrade the energy efficiency of eligible facilities. If recommended by a Sawnee Commercial Marketing Representative (CMR), commercial customers can receive rebates for the installation of high efficiency lighting, solar film window tinting, energy management systems and equipment upgrades that result in peak demand reduction. To receive this rebate, the CMR must inspect the facility both before and after the equipment installation. All Sawnee EMC requirements must be met in order to receive rebate. Check web site for certain rebate applications and contact Sawnee EMC to receive more precise instructions and requirements for the program.

13. TVA- Solar Solutions Initiative a. Solar Solutions Initiative (SSI) is a pilot program that offers additional

financial incentives for Solar PV systems participating in the Renewable Standard Offer program. Applications for new projects for the year 2015 will open on January 2, 2015. Participants applying for the Solar Solutions Incentive program are required to apply through the Renewable Standard Offer program. The program offers performance-based incentive of $0.04/kWh for the first 10 years after the project is operational. This incentive is additional to the seasonal and time-of-day price for electricity offered through the Renewable Standard Offer program. The total capacity for the program for the year 2015 is capped at 20 MW with set aside of 12 MW for traditional SSI participants, 4 MW for projects between 50kW- 200kW and 4MW for local power company participants. Aside from the 2015 capacity of 20MW, the program has offered total cumulative capacity of 36MW since its inception in 2012.

14. Georgia Power- Commercial Energy Efficiency Rebate Program a. Georgia Power offers rebates to all new and existing commercial customers

on an eligible commercial rate plan. Incentives are available for lighting,

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heating and cooling equipment, reflective roofing, food service equipment, refrigeration equipment, water heating measures and others. Custom options are also available.

15. TVA- Energy Right Solutions for Business a. TVA offers the Energy Right Solutions Program to commercial and industrial

facilities. In addition to prescriptive rebates for lighting, motors, HVAC, and kitchen equipment, administrators take a custom baseline of pre-installation demand and compare to post installation measurements to determine the financial incentive amount in kilowatt-hour values. The incentives program is offered along with complimentary energy assessments and reviews to determine potential areas for savings. Customers can work with designers and installers to develop a project plan and complete a participation application form. Participants should receive a pre-installation incentive notification letter before removing any existing equipment.

North Carolina (back to top) 1. USDA- Biorefinery Assistance Program

a. USDA Rural Development is offering loan guarantees for the development, construction, and retrofitting of commercial-scale biorefineries. Eligible borrowers include individuals, entities, Indian tribes, state or local governments, corporations, farm cooperatives or farm cooperative organizations, associations of agricultural producers, National Laboratories, institutions of higher education, rural electric cooperatives, public power entities, and consortium of any of these types of entities. Financed entities must provide at least 20% of the financing for eligible project costs, and applications for funding must include an independent feasibility study and technical assessment. Eligible project costs include the purchase and installation of equipment, construction or retrofitting costs, permit and licensing fees, working capital, land acquisition, and the costs of financing. The project must meet the following requirements:

i. Must be for the development and construction or the retrofitting of a commercial-scale biorefinery using an eligible technology

ii. Must use an eligible feedstock for the production of advanced biofuels and biobased products

iii. The majority of the production must be an advanced biofuels b. Eligible advanced biofuels include:

i. Biofuel derived from cellulose, hemicellulose, or lignin, or other fuels derived from cellulose

ii. Biofuel derived from sugar, starch, excluding ethanol derived from corn kernel starch

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iii. Biofuel derived from waste material, including crop residue, vegetative waste material, animal waste, food waste, and yard waste

iv. Diesel fuel derived from renewable biomass, including vegetable oil and animal fat

v. Biogas, including landfill gas and sewage waste treatment gas, produced through the conversion of organic matter from renewable biomass

c. In 2014, "renewable chemicals” and "biofuels" were added to this program under the name of Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program to provide guaranteed loans for the development and construction of commercial-scale biorefineries or for the retrofitting of existing facilities using eligible technology for the development of advanced biofuels.

d. Congress allocated $75 million for FY 2009 and $245 million for FY 2010, in addition to up to $150 million in discretionary funds annually beginning in FY 2009. The American Taxpayer Relief Act of 2012 extended discretionary funding through FY 2013. For FY 2014, approximately $76 million in carry over budget will support a program level of approximately $181 million.

2. Business Energy Investment Tax Credit a. Note: IRS Notice 2015-4 included new certification requirements for small

wind turbines placed in service after January 26, 2015. Small wind turbines must now meet the performance and quality standards set forth by either the American Wind Energy Association Small Wind Turbine Performance and Safety Standard 9.1-2009 (AWEA), or the International Electrotechnical Commission 61400-1, 61400-12, and 61400-11 (IEC)

b. The federal business energy investment tax credit available under 26 USC § 48 was expanded significantly by the Energy Improvement and Extension Act of 2008 (H.R. 1424), enacted in October 2008. This law extended the duration -- by eight years -- of the existing credits for solar energy, fuel cells and microturbines; increased the credit amount for fuel cells; established new credits for small wind-energy systems, geothermal heat pumps, and combined heat and power (CHP) systems; allowed utilities to use the credits; and allowed taxpayers to take the credit against the alternative minimum tax (AMT), subject to certain limitations. The American Recovery and Reinvestment Act of 2009, enacted in February 2009, further expanded the credit. In general, the following credits are available for eligible systems placed in service on or before December 31, 2016*:

i. Solar. The credit is equal to 30% of expenditures, with no maximum credit. Eligible solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot

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water for use in) a structure, or to provide solar process heat. Hybrid solar lighting systems, which use solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight, are eligible. Passive solar systems and solar pool-heating systems are not eligible.

ii. Fuel Cells. The credit is equal to 30% of expenditures, with no maximum credit. However, the credit for fuel cells is capped at $1,500 per 0.5 kilowatt (kW) of capacity. Eligible property includes fuel cells with a minimum capacity of 0.5 kW that have an electricity-only generation efficiency of 30% or higher. (Note that the credit for property placed in service before October 4, 2008, is capped at $500 per 0.5 kW.)

iii. Small Wind Turbines. The credit is equal to 30% of expenditures, with no maximum credit for small wind turbines placed in service after December 31, 2008. Eligible small wind property includes wind turbines up to 100 kW in capacity. (In general, the maximum credit is $4,000 for eligible property placed in service after October 3, 2008, and before January 1, 2009. The American Recovery and Reinvestment Act of 2009 removed the $4,000 maximum credit limit for small wind turbines.) Small wind turbines must meet the performance and quality standards set forth by either the American Wind Energy Association Small Wind Turbine Performance and Safety Standard 9.1-2009 (AWEA), or the International Electrotechnical Commission 61400-1, 61400-12, and 61400-11 (IEC)

iv. Geothermal Systems. The credit is equal to 10% of expenditures, with no maximum credit limit stated. Eligible geothermal energy property includes geothermal heat pumps and equipment used to produce, distribute or use energy derived from a geothermal deposit. For electricity produced by geothermal power, equipment qualifies only up to, but not including, the electric transmission stage. For geothermal heat pumps, this credit applies to eligible property placed in service after October 3, 2008. Note that the credit for geothermal property, with the exception of geothermal heat pumps, has no stated expiration date.

v. Microturbines. The credit is equal to 10% of expenditures, with no maximum credit limit stated (explicitly). The credit for microturbines is capped at $200 per kW of capacity. Eligible property includes microturbines up to two megawatts (MW) in capacity that have an electricity-only generation efficiency of 26% or higher.

vi. Combined Heat and Power (CHP). The credit is equal to 10% of expenditures, with no maximum limit stated. Eligible CHP property

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generally includes systems up to 50 MW in capacity that exceed 60% energy efficiency, subject to certain limitations and reductions for large systems. The efficiency requirement does not apply to CHP systems that use biomass for at least 90% of the system's energy source, but the credit may be reduced for less-efficient systems. This credit applies to eligible property placed in service after October 3, 2008.

c. In general, the original use of the equipment must begin with the taxpayer, or the taxpayer must construct the system. The equipment must also meet any performance and quality standards in effect at the time the equipment is acquired. The energy property must be operational in the year in which the credit is first taken. Significantly, the American Recovery and Reinvestment Act of 2009 repealed a previous restriction on the use of the credit for eligible projects also supported by "subsidized energy financing." For projects placed in service after December 31, 2008, this limitation no longer applies. Businesses that receive other incentives are advised to consult with a tax professional regarding how to calculate this federal tax credit.

d. * A number of changes to this credit are scheduled to take effect for systems placed in service after December 31, 2016. The credit for equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat will decrease from 30% to 10%. The credit for geothermal heat pumps, hybrid solar lighting, small wind, fuel cells, microturbines, and combined heat and power systems will expire. The credit amount for equipment, which uses geothermal energy to produce electricity, will remain at 10%.

3. Renewable Energy Tax Credit (Corporate) a. Note: Senate Bill 372, signed in April 2015, provides a delayed sunset of the

tax credit for projects that meet certain criteria. See below for more information.

b. North Carolina offers a tax credit equal to 35% of the cost of eligible renewable energy property constructed, purchased or leased by a taxpayer and placed into service in North Carolina during the taxable year. The credit has been amended several times since its original inception. House Bill 512 of 2009 extended the eligibility to geothermal equipment, extended the expiration date to December 31, 2015, and allowed the credit to be taken against the Gross Premiums Tax. HB 1829 of 2010 further extended this credit to combined heat and power systems. The credit is subject to various ceilings depending on sector and the type of renewable-energy system. The following credit limits for various technologies and sectors apply:

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i. A maximum of $3,500 per dwelling unit for active solar space heating, combined active solar space and domestic water-heating systems, and passive solar space heating used for a non-business purpose;

ii. A maximum of $1,400 per installation for solar water-heating systems, including solar pool-heating systems used for a non-business purpose;

iii. A maximum of $8,400 for geothermal heat pumps and geothermal equipment that uses geothermal energy for water heating or active space heating or cooling used for a non-business purpose;

iv. A maximum of $10,500 per installation for photovoltaic systems (also known as PV systems or solar-electric systems), wind-energy systems, combined heat and power systems, or certain other renewable-energy systems used for a non-business purpose

v. A maximum of $2.5 million* per installation for all solar, wind, hydro, geothermal, combined heat and power (as defined by Section 48 of the U.S. Tax Code), and biomass applications** used for a business purpose***, including PV, daylighting, solar water heating and space-heating technologies.

c. Renewable-energy equipment expenditures eligible for the tax credit include the cost of the equipment and associated design; construction costs; and installation costs less any discounts, rebates, advertising, installation-assistance credits, name-referral allowances or other similar reductions provided by public funds. SB 388 of 2010 clarified that federal grants made available by Section 1603 of the American Recovery and Reinvestment Tax Act of 2009 do not constitute public funds. The allowable credit may not exceed 50% of a taxpayer's state tax liability for the year, reduced by the sum of all other state tax credits. Qualifying renewable-energy systems used for a non-business purpose must take the maximum credit amount allowable for the tax year in which the system is installed. For all other taxpayers, the credit is taken in five equal installments beginning with the year in which the property is placed in service. If the credit is not used entirely in the first year (for non-business systems) or during the first five years (for business systems), the remaining amount may be carried over for the next five years. The credit can be taken against franchise tax, corporate tax, income tax, or in the case of insurance companies, against the gross premiums tax.

d. SB 3 of 2007 amended North Carolina's renewable energy tax credit statute to allow a taxpayer who donates money to a tax-exempt nonprofit to help fund a renewable energy project to claim a tax credit. The donor may claim a share of the credit -- proportional to the project costs donated -- that the nonprofit could claim if the organization were subject to tax. HB 2436 of 2008 applied

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this same mechanism to donations made to units of state and local governments.

e. The tax credit is scheduled to expire on December 31, 2015. SB 372, signed in April 2015, provides a delayed sunset of December 31, 2016 for projects that meet certain criteria. Projects with a total size of less than 65 MW, can qualify for the delayed sunset if it incurred 80% of its costs and completed 80% of the construction by December 31, 2015. Projects with a total size of 65 MW or greater, can qualify for the delayed sunset if it incurred 50% of its costs and completed 50% of the construction by December 31, 2015. The legislation provides further stipulations about certain documentation and application fees that must be provided in order to qualify.

f. * House Bill 1973 of 2010 specified that systems installed for business purposes at a site that has been certified as an eco-industrial park by the Secretary of Commerce are subject to a higher tax credit cap of $5 million. Section 5.1 of the bill describes the characteristics required to be deemed an eco-industrial park.

g. ** The N.C. Tax Credit Guidelines and relevant North Carolina statutes provide a description of the types of biomass and biomass applications that are eligible for the tax credit. (See links above.) Note that residential wood burning stoves do not qualify for this tax credit.

h. ***HB 1829 of 2010 states "renewable energy property is placed in service for a business purpose if the useful energy generated by the property is offered for sale or is used on-site for a purpose other than providing energy to a residence."

4. Renewable Electricity Production Tax Credit a. Note: In December 2014, The Tax Increase Prevention Act of 2014 extended

the expiration date for this tax credit to December 31, 2014. Projects that are not under construction prior to January 1, 2015, are ineligible for this credit. In March 2015, IRS Notice 2015-25 extended the Continuous Construction Test and Continuous Efforts Test (used to determine if a project commencing construction before the end of 2014 is eligible for the PTC) by 1 year to January 1, 2017.

b. The federal renewable electricity production tax credit (PTC) is an inflation-adjusted per-kilowatt-hour (kWh) tax credit for electricity generated by qualified energy resources and sold by the taxpayer to an unrelated person during the taxable year. Originally enacted in 1992, the PTC has been renewed and expanded numerous times, most recently by the American Recovery and Reinvestment Act of 2009 (H.R. 1 Div. B, Section 1101 & 1102) in February 2009 (often referred to as "ARRA"), the American Taxpayer

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Relief Act of 2012 (H.R. 8, Sec. 407) in January 2013, and the Tax Increase Prevention Act of 2014 (H.R. 5771, Sec. 155) in December 2014.

c. The tax credit amount is $0.015 per kWh in 1993 dollars for some technologies and half of that amount for others. The amount is adjusted for inflation by multiplying the tax credit amount by the inflation adjustment factor for the calendar year in which the sale occurs, rounded to the nearest 0.1 cents. The Internal Revenue Service (IRS) publishes the inflation adjustment factor no later than April 1 each year in the Federal Registrar. (For 2014, the inflation adjustment factor used by the IRS is 1.5088.) The table below outlines the credit amount as it applies to different resource types. The table includes changes made by H.R. 8 in January 2013, and the inflation-adjusted credit amounts are current for the 2014 calendar year, as published in the IRS Notice 2014-36.

Resource Type Credit Amount

Wind $0.023/kWh

Closed-Loop Biomass

$0.023/kWh

Open-Loop Biomass $0.011/kWh

Geothermal Energy $0.023/kWh

Landfill Gas $0.011/kWh

Municipal Solid Waste

$0.011/kWh

Qualified Hydroelectric

$0.011/kWh

Marine and Hydrokinetic

$0.011/kWh

d. The duration of the credit is generally 10 years after the date the facility is

placed in service, but there are two exceptions: i. open-loop biomass, geothermal, small irrigation hydro, landfill gas,

and municipal solid waste combustion facilities placed into service

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after October 22, 2004, and before enactment of the Energy Policy Act of 2005, on August 8, 2005, are only eligible for the credit for a 5-year period, and

ii. open-loop biomass facilities placed in service before October 22, 2004, are eligible for the 5-year period beginning January 1, 2005.

e. The credit is claimed by completing Form 8835, "Renewable Electricity Production Credit," and Form 3800, "General Business Credit." For more information, contact IRS Telephone Assistance for Businesses at 1-800-829-4933.

f. The Tax Increase Prevention Act of 2014 (H.R. 5771, Sec. 155) extended both the PTC and permission for PTC-eligible facilities to claim the Investment Tax Credit in lieu of the PTC through the end of 2014. (Prior to the legislation, the PTC had expired December 31, 2013.) Although not enacted until December 2014, the effective date is January 1, 2014, meaning any qualifying project that commenced construction at any point in 2014 is eligible to claim the PTC. The American Taxpayer Relief Act of 2012 revised the PTC by removing "placed in service" deadlines and replacing them with deadlines that use the commencing of construction as a basis for determining facility eligibility. It also contained language revising the definition of the term "municipal solid waste" to exclude "paper that is commonly recycled and which has been segregated from other solid waste.” The definition change for municipal solid waste applies to electricity produced and sold after the enactment date of the legislation (January 2, 2013) in taxable years ending after that date.

g. To claim the PTC, construction on an eligible project must have “commenced construction” prior to January 1, 2015. The IRS has issued guidance on how it will evaluate whether construction has commenced in IRS Notices 2013-29, 2013-60, 2014-46, and 2015-25 (please see the full text of these notices for complete information on determining the commencing of construction). The guidelines establish two methods—a “physical work” test and a 5% safe harbor (see sections below for details)—to determine when construction has begun on a qualified facility. Meeting the criteria of either method is sufficient to demonstrate that construction has commenced. Both methods require that a taxpayer make continuous progress towards completion once construction has begun by meeting the Continuous Construction Test (to satisfy the Physical Work Test) or the Continuous Efforts Test (to satisfy Safe Harbor). For projects beginning construction before the end of 2014 and placed in service before January 1, 2017, the facility will be considered to satisfy the Continuous Construction Test or the Continuous Efforts Test, regardless of

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the amount of physical work performed or the amount of costs paid or incurred (Notice 2015-25).

h. The physical work test provides that a taxpayer may establish the beginning of construction by beginning "physical work of a significant nature.” The physical work test is based on the nature of the work performed rather than the cost of the work; if the work performed is of a significant nature, then “there is no fixed minimum amount of work or monetary or percentage threshold required to satisfy the Physical Work Test” (Notice 2014-46). Notice 2013-29 provides several examples of actions that constitute work of a significant nature, including:

i. for a facility that produces electricity from a wind turbine, the beginning of the excavation for the foundation, the setting of anchor bolts into the ground, or the pouring of the concrete pads of the foundation;

ii. physical work on a custom-designed transformer that steps up the voltage of electricity produced at the facility to the voltage needed for transmission; and

iii. beginning construction of roads integral to the activity performed by the facility including onsite roads used for moving materials to be processed (e.g., biomass) and roads for equipment to operate and maintain the facility.

i. Safe Harbor with respect to a facility is demonstrated by showing that 5% or more of the total cost of the facility was paid or incurred before January 1, 2015. If less than 5% of the total cost of the facility was paid or incurred prior to January 1, 2015, Safe Harbor is not fully satisfied; however, if a taxpayer paid or incurred at least 3%, the Safe Harbor may be satisfied and the PTC (or ITC) may be claimed with respect to some, but not all, of the individual facilities comprising the project. Specifically, “a taxpayer may claim the PTC or ITC on any number of individual facilities as long as the total aggregate cost of those individual facilities at the time the project is placed in service is not greater than 20 times the amount the taxpayer paid or incurred before” January 1, 2015 (Notice 2014-46)

5. NC GreenPower Production Incentive a. Note: As of March 26, 2015, NC GreenPower has imposed an annual

program cap of 100 kW for small PV systems. b. NC GreenPower, a statewide green power program designed to encourage the

use of renewable energy in North Carolina, offers production payments for grid-tied electricity generated by solar, wind, small hydro (10 megawatts or less) and biomass resources. Payment arrangements for electricity generated by most renewable energy systems may be available by submitting proposals

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for consideration when NC GreenPower issues an RFP. However, owners of small solar energy systems (5 kW or less) and small wind energy systems (10 kW or less) may currently apply to receive program incentives at any time. Owners of small solar energy systems or wind-energy systems are encouraged to review and fill out an online application, available on the NC GreenPower web site. Note that customer-generators who choose to net meter are not eligible to participate in the NC GreenPower Program. Generators are required to enter into power-purchase agreements with their North Carolina electric utility and with NC GreenPower. However, because premiums paid to NC GreenPower are funded exclusively by voluntary contributions from North Carolina electric customers, NC GreenPower do not provide guaranteed contracts to generators. Production incentives are based on the amount expected to make the installation of renewable-energy systems approach economic feasibility. The incentives, which include payments from utility power-purchase agreements, are made on a per-kilowatt-hour (kWh) basis and vary by technology. Owners of small solar-electric systems enrolled in NC GreenPower receive $0.06/kWh from the program, plus approximately $0.04/kWh from their utility under the power-purchase agreement, for a total production payment of about $0.10/kWh. Owners of small wind-energy systems receive $0.09/kWh from the program, plus approximately $0.04/kWh from their utility, for a total production payment of about $0.13/kWh.* NC GreenPower is an independent, nonprofit organization created by state-government officials, electric utilities, nonprofit organizations, consumers, renewable-energy advocates and other stakeholders. It began operation in October 2003 as the first statewide green-power program in the United States. North Carolina's three investor-owned utilities -- Dominion North Carolina Power, Duke Energy and Progress Energy -- and many of the state's municipal utilities and electric cooperatives are participating in the NC GreenPower Program.

c. * Some North Carolina utilities charge an interconnection fee of approximately $4.00 per month for systems under 10 kW.

6. USDA- Repowering Assistance Biorefinery Program a. The Repowering Assistance Program provides payments to eligible

biorefineries to replace fossil fuels used to produce heat or power to operate the biorefineries with renewable biomass. Reimbursement payments are provided to offset a portion of the costs associated with the conversion of existing fossil fuel systems to renewable biomass fuel systems. The reimbursement amounts vary and are determined by the availability of funds, the project scope, and the ability of the proposed project to meet all the scoring criteria. In particular reimbursement amounts are calculated by the

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percentage reduction in fossil fuel used by the biorefinery, the quantity of fossil fuels replaced by a renewable biomass system, and the cost effectiveness of the renewable biomass system. The program will provide reimbursement payments for eligible project costs of the renewable biomass system during the construction phase of the repowering project. Up to 90% of the funds can be utilized during project construction, with the remaining 10% made upon demonstration of successful completion of the project. A maximum of 50% of the total project costs can be reimbursed, as long as amount does not exceed the maximum award for the fiscal year.

b. Eligible technologies may include, but are not limited to, anaerobic digesters, processed steam, biomass boilers, or combined heat and power technologies (CHP). Applicants must demonstrate, at the time of application, that the proposed site has direct access to biomass or third party commitments to supply biomass for the repowering project for at least three years. Payments are made for eligible post-application costs incurred during the construction phase of the repowering project. Congress allocated $35 million for FY 2009, in addition to up to $15 million in discretionary funds annually beginning in FY 2009. The American Taxpayer Relief Act of 2012 extended discretionary funding through FY 2013.

7. Modified Accelerated Cost- Recovery System a. Note: Sec. 125 of H.R. 5771, the Tax Increase Prevention Act of 2014,

extended the "placed in service" date of the 50% bonus depreciation provision originally included in the American Recovery and Reinvestment Act of 2009 to December 31, 2014, and thus retroactively through the 2014 tax year.

b. Under the federal Modified Accelerated Cost-Recovery System (MACRS), businesses may recover investments in certain property through depreciation deductions. The MACRS establishes a set of class lives for various types of property, ranging from three to 50 years, over which the property may be depreciated. A number of renewable energy technologies are classified as five-year property (26 USC § 168(e)(3)(B)(vi)) under the MACRS, which refers to 26 USC § 48(a)(3)(A), often known as the energy investment tax credit or ITC to define eligible property. Such property currently includes*:

i. a variety of solar-electric and solar-thermal technologies ii. fuel cells and microturbines

iii. geothermal electric iv. direct-use geothermal and geothermal heat pumps v. small wind (100 kW or less)

vi. combined heat and power (CHP)

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vii. the provision which defines ITC technologies as eligible also adds the general term "wind" as an eligible technology, extending the five-year schedule to large wind facilities as well.

c. In addition, for certain other types of renewable energy property, such as biomass or marine and hydrokinetic property, the MACRS property class life is seven years. Eligible biomass property generally includes assets used in the conversion of biomass to heat or to a solid, liquid or gaseous fuel, and to equipment and structures used to receive, handle, collect and process biomass in a waterwall, combustion system, or refuse-derived fuel system to create hot water, gas, steam and electricity. Marine and hydrokinetic property includes facilities that utilize waves, tides, currents, free-flowing water, or differentials in ocean temperature to generate energy. It does not include traditional hydropower that uses dams, diversionary structures, or impoundments. The 5-year schedule for most types of solar, geothermal, and wind property has been in place since 1986. The federal Energy Policy Act of 2005 (EPAct 2005) classified fuel cells, microturbines and solar hybrid lighting technologies as five-year property as well by adding them to § 48(a)(3)(A). This section was further expanded in October 2008 by the addition of geothermal heat pumps, combined heat and power, and small wind under The Energy Improvement and Extension Act of 2008.

d. The federal Economic Stimulus Act of 2008, enacted in February 2008, included a 50% first-year bonus depreciation (26 USC § 168(k)) provision for eligible renewable-energy systems acquired and placed in service in 2008. The allowance for bonus depreciation has since been extended and modified several times since the original enactment, most recently in December 2014 by the Tax Increase Prevention Act Of 2014 (H.R. 5771, Sec. 125). This legislation extended the "in-service" provision for qualifying property through to December 31, 2014, and thus also did so retroactively for property placed in service after December 31, 2013, through to enactment.

e. The 50% first-year bonus depreciation provision enacted in 2008 was extended (retroactively for the entire 2009 tax year) under the same terms by the American Recovery and Reinvestment Act of 2009 (H.R. 1), enacted in February 2009. It was renewed again in September 2010 (retroactively for the entire 2010 tax year) by the Small Business Jobs Act of 2010 (H.R. 5297). In December 2010 the provision for bonus depreciation was amended and extended yet again by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (H.R. 4853). Under these amendments, eligible property placed in service after September 8, 2010 and before January 1, 2012 was permitted to qualify for 100% first-year bonus depreciation. The December 2010 amendments also permitted bonus

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depreciation to be claimed for property placed in service during 2012, but reverted the allowable amount from 100% to 50% of the eligible basis. The 50% first-year bonus depreciation allowance was further extended for property placed in service during 2013 by the American Taxpayer Relief Act of 2012 (H.R. 8, Sec. 331) in January 2013. As noted above, the Tax Increase Prevention Act Of 2014 (H.R. 5771, Sec. 125), extended these provisions through to December 31, 2014, and thus retroactively for the 2014 tax year.

f. *Note that the definitions of eligible technologies included in this entry are somewhat simplified versions of those contained in tax code, which often contain additional caveats, restrictions, and modifications. Those interested in this incentive should review the relevant sections of the code in detail prior to making business decisions.

8. Energy Efficient Commercial Buildings Tax Deduction a. Note: This tax deduction expired at the end of 2013. The Tax Increase

Prevention Act of 2014 retroactively reinstated the tax credit for projects completed in 2014.

b. The federal Energy Policy Act of 2005 established a tax deduction for energy-efficient commercial buildings applicable to qualifying systems and buildings placed in service from January 1, 2006, through December 31, 2007. This deduction was subsequently extended through 2008, and then again through 2013 by Section 303 of the federal Energy Improvement and Extension Act of 2008 (H.R. 1424, Division B), enacted in October 2008. A tax deduction of $1.80 per square foot is available to owners of new or existing buildings who install (1) interior lighting; (2) building envelope, or (3) heating, cooling, ventilation, or hot water systems that reduce the building’s total energy and power cost by 50% or more in comparison to a building meeting minimum requirements set by ASHRAE Standard 90.1-2001. Energy savings must be calculated using qualified computer software approved by the IRS. Click here for the list of approved software. Deductions of $0.60 per square foot are available to owners of buildings in which individual lighting, building envelope, or heating and cooling systems meet target levels that would reasonably contribute to an overall building savings of 50% if additional systems were installed. The deductions are available primarily to building owners, although tenants may be eligible if they make construction expenditures. In the case of energy efficient systems installed on or in government property, tax deductions will be awarded to the person primarily responsible for the system's design. Deductions are taken in the year when construction is completed. The IRS released interim guidance (IRS Notice 2006-52) in June 2006 to establish a process to allow taxpayers to obtain a certification that the property satisfies the energy efficiency requirements

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contained in the statute. IRS Notice 2008-40 was issued in March of 2008 to further clarify the rules. NREL published a report (NREL/TP-550-40228) in February 2007, which provides guidelines for the modeling and inspection of energy savings required by the statute.

9. USDA- Rural Energy for America Program (Grants) a. Note: The U.S. Department of Agriculture's Rural Development issues

periodic Notices of Solicitation of Applications for the Rural Energy for America Program (REAP) in the Federal Registry. The most recent solicitation for the REAP program was on May 5th, 2014 and can be viewed in the Federal Registry here. The next Notice of Funding Availability will be published in the Federal Registry and on the USDA website here.

b. Notably, the 2014 Farm Bill removed authority for the USDA to fund REAP feasibility studies with REAP grants.

c. The Rural Energy for America Program (REAP) provides financial assistance to agricultural producers and rural small businesses in rural America to purchase, install, and construct renewable energy systems, make energy efficiency improvements to non-residential buildings and facilities, use renewable technologies that reduce energy consumption, and participate in energy audits and renewable energy development assistance. Renewable energy projects for the Renewable Energy Systems and Energy Efficiency Improvement Guaranteed Loan and Grant Program include wind, solar, biomass and geothermal, and hydrogen derived from biomass or water using wind, solar, or geothermal energy sources. These grants are limited to 25% of a proposed project's cost, and a loan guarantee may not exceed $25 million. The combined amount of a grant and loan guarantee must be at least $5,000 (with the grant portion at least $1,500) and may not exceed 75% of the project’s cost. In general, a minimum of 20% of the funds available for these incentives will be dedicated to grants of $20,000 or less. For more information on grant, loan guarantees, loan financing, and opportunities for combinations thereof, visit the USDA website. In 2014, $12.3 million in grants and $56.4 million in loans was awarded. For a complete list of 2014 projects, click here.

d. Grants and loans are generally available to state government entities, local governments, tribal governments, land-grant colleges and universities**, rural electric cooperatives and public power entities, and other entities, as determined by the USDA. To be eligible for REAP grants and loans, an applicant must have a satisfactory revenue stream and be in control the budget, operations, and maintenance of a project for the entire duration of the loan or grant. Rural small businesses must be located in rural areas, but agricultural producers may be located in non-rural areas. Eligible project costs include purchasing energy efficiency improvements or a renewable energy

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system, energy audits or assessments, permitting and licensing fees, and business plans and retrofitting. For new construction the replacement of older equipment with more efficient equipment may be eligible as a project cost only when a new facility is planned to be more efficient and similarly sized than the older facility. Working capital and land acquisition are only eligible for loan guarantees. Regional rural energy coordinators provide loan and grant applications upon request.

e. The Food, Conservation, and Energy Act of 2008 (H.R. 2419), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program, * into the Rural Energy for America Program (REAP). Similar to its predecessor, the REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the new program in the following amounts: $55 million for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, up to $25 million in discretionary funding may be issued each year. The American Taxpayer Relief Act of 2012 (H.R. 8) extended discretionary funding for FY 2013. The 2014 Farm Bill reauthorized the USDA to offer these programs and removed the mandate to offer grants for feasibility studies.

f. * The Renewable Energy Systems and Energy Efficiency Improvements Program was created by the USDA pursuant to Section 9006 of the 2002 federal Farm Security and Rural Investment Act of 2002. Funding in the amount of $23 million per year was appropriated for each fiscal year from FY 2003-2007. In March 2008, the USDA announced that it would accept $220.9 million in applications for grants, loan guarantees, and loan/grant combination packages under the Renewable Energy Systems and Energy Efficiency Improvements Program. The application deadline was June 16, 2008.

g. **Land grant colleges and universities are referred to above as "schools" and "institutions". It is important to note that K-12 schools are not eligible for this grant.

10. USDA- Rural Energy for America Program (Loan Guarantees) a. Note: The U.S. Department of Agriculture's Rural Development issues

periodic Notices of Solicitation of Applications for the Rural Energy for America Program (REAP) in the Federal Registry. The most recent solicitation for the REAP program was on May 5th, 2014 and can be viewed

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in the Federal Registry here. The next Notice of Funding Availability will be published in the Federal Registry and on the USDA website here.

b. Notably, the 2014 Farm Bill removed authority for the USDA to fund REAP feasibility studies with REAP grants.

c. The Rural Energy for America Program (REAP) provides financial assistance to agricultural producers and rural small businesses in rural America to purchase, install, and construct renewable energy systems, make energy efficiency improvements to non-residential buildings and facilities, use renewable technologies that reduce energy consumption, and participate in energy audits and renewable energy development assistance. Renewable energy projects for the Renewable Energy Systems and Energy Efficiency Improvement Guaranteed Loan and Grant Program include wind, solar, biomass and geothermal, and hydrogen derived from biomass or water using wind, solar, or geothermal energy sources. These grants are limited to 25% of a proposed project's cost, and a loan guarantee may not exceed $25 million. The combined amount of a grant and loan guarantee must be at least $5,000 (with the grant portion at least $1,500) and may not exceed 75% of the project’s cost. In general, a minimum of 20% of the funds available for these incentives will be dedicated to grants of $20,000 or less. For more information on grant, loan guarantees, loan financing, and opportunities for combinations thereof, visit the USDA website. In 2014, $12.3 million in grants and $56.4 million in loans was awarded. For a complete list of 2014 projects, click here.

d. Grants and loans are generally available to state government entities, local governments, tribal governments, land-grant colleges and universities**, rural electric cooperatives and public power entities, and other entities, as determined by the USDA. To be eligible for REAP grants and loans, an applicant must have a satisfactory revenue stream and be in control the budget, operations, and maintenance of a project for the entire duration of the loan or grant. Rural small businesses must be located in rural areas, but agricultural producers may be located in non-rural areas. Eligible project costs include purchasing energy efficiency improvements or a renewable energy system, energy audits or assessments, permitting and licensing fees, and business plans and retrofitting. For new construction the replacement of older equipment with more efficient equipment may be eligible as a project cost only when a new facility is planned to be more efficient and similarly sized than the older facility. Working capital and land acquisition are only eligible for loan guarantees. Regional rural energy coordinators provide loan and grant applications upon request.

e. The Food, Conservation, and Energy Act of 2008 (H.R. 2419), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and

49

Energy Efficiency Improvements Program,* into the Rural Energy for America Program (REAP). Similar to its predecessor, the REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the new program in the following amounts: $55 million for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, up to $25 million in discretionary funding may be issued each year. The American Taxpayer Relief Act of 2012 (H.R. 8) extended discretionary funding for FY 2013. The 2014 Farm Bill reauthorized the USDA to offer these programs and removed the mandate to offer grants for feasibility studies.

f. * The Renewable Energy Systems and Energy Efficiency Improvements Program was created by the USDA pursuant to Section 9006 of the 2002 federal Farm Security and Rural Investment Act of 2002. Funding in the amount of $23 million per year was appropriated for each fiscal year from FY 2003-2007. In March 2008, the USDA announced that it would accept $220.9 million in applications for grants, loan guarantees, and loan/grant combination packages under the Renewable Energy Systems and Energy Efficiency Improvements Program. The application deadline was June 16, 2008. **Land grant colleg

"schools" and "institutions". It is important to note that K-12 schools are not eligible for this grant.

11. USDA- High Energy Cost Grant Program a. NOTE: The most recent solicitation for this program closed August 1, 2014.

Please check the program website for information on future solicitations. b. The U.S. Department of Agriculture (USDA) offers an ongoing grant program

for the improvement of energy generation, transmission, and distribution facilities in rural communities. This program began in 2000. Eligibility is limited to projects in communities that have average home energy costs at least 275% above the national average. Individuals, non-profits, commercial entities, state and local governments (including any agency or instrumentality thereof), and tribal governments are eligible for this grant. Individuals must work on a project that will benefit the community in order to qualify. Under the most recent solicitation for projects, a total of $7 million was available for qualifying projects. Under this solicitation grants ranging from $50,000 to $3 million were available for a variety of activities, including:

i. Electric generation, transmission, and distribution facilities;

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ii. Natural gas or petroleum storage or distribution facilities; iii. Renewable energy facilities used for on-grid or off-grid electric power

generation, water or space heating, or process heating and power; iv. Backup up or emergency power generation or energy storage

equipment; and v. Weatherization of residential and community property, or other energy

efficiency or conservation programs. c. This grant program is not limited to renewable energy or energy conservation

and efficiency measures, but these measures are eligible for this grant program.

12. U.S. Department of Energy- Loan Guarantee Program a. Section 1703 of Title XVII of the Energy Policy Act (EPAct) of 2005 created

the Department of Energy's (DOE's) Loan Guarantee Program. The program was reauthorized and revised by the American Recovery and Reinvestment Act (ARRA) of 2009 by adding Section 1705 to EPAct. The 1705 Program was retired in September 2011, and Loan Guarantees are no longer available under that authority. DOE, however, still has authority to issue Loan Guarantees under the old Section 1703 Program. Under Section 1703, DOE is authorized to issue loan guarantees for projects with high technology risks 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." Loan guarantees are intended to encourage early commercial use of new or significantly improved technologies in energy projects. The loan guarantee program generally does not support research and development projects. Loan guarantees are provided in response to open solicitations. A solicitation for Renewable Energy Projects and Energy Efficiency Projects was issued in July 2014, with a final Part I application due date of December 2, 2015. Up to $2.5 billion is available for projects in renewable energy, efficient end-use, and efficient generation, transmission, and distribution technologies. See the program website for more details on eligibility and the application process. Section 1703 requires either an appropriation to cover the Credit Subsidy Cost (the expected long term liability to the Federal Government for providing the loan guarantee), or payment of the Credit Subsidy Cost by the borrower. A credit-based interest rate spread will be added to certain loans receiving a 100% loan guarantee from DOE and financing from the Federal Financing Bank. Rates and more information are available here.

13. Active Solar Heating and Cooling Systems Exemption

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a. Active solar heating and cooling systems may not be assessed at more than the value of a conventional system for property tax purposes. This law applies only to active solar systems and does not include any land or structural elements of buildings, such as walls and roofs, or other equipment ordinarily contained in a building. Specifically, a "system" includes all controls, tanks, pumps, heat exchangers and other equipment used directly and exclusively for the conversion of solar energy for heating or cooling. Systems placed on residential, commercial and industrial property are eligible for this exclusion.

14. Property Tax Abatement for Solar Electric Systems a. In August 2008, North Carolina enacted legislation that exempts 80% of the

appraised value of a "solar energy electric system" (also known as a photovoltaic, or PV, system) from property tax. For the purposes of this assessment, the term "solar energy electric system" means "all equipment used directly and exclusively for the conversion of solar energy to electricity." This incentive is effective for taxable years beginning on or after July 1, 2008. A Memorandum sent to County Commissioners in February 2011 clarified that residential PV system that are not used to generate income or in connection with a business may be entirely exempt from property taxes as non-business personal property. The Memorandum provides further guidance for determining if a system can be exempted as non-business personal property. System owners should review the Memorandum and consult their local property assessment office if they have questions.

15. TVA- Mid-Sized Renewable Standard Offer Program a. The Tennessee Valley Authority (TVA) now compliments the small

generation Green Power Providers Program by providing incentives for mid-sized renewable energy generators between 50kW and 20MW to enter into long term price contracts. The goal for total production from all participants is 100MW, with no more than 50MW from any one renewable technology. The Renewable Standard Offer program also includes Solar Solution Initiative program that offers additional financial incentives for Solar Photovoltaic (PV) projects. TVA bases the standard offer for customer generators off of a seasonal time-of-day averages chart, which sets base prices for the term of the contract. For projects approved after January 2015, prices increase at a rate of 5% per year beginning in 2016 and may be changed with 90 days’ notice by TVA (no more than 1% per year). For 2015, the average price is expected range between $0.029/kWh during low demand periods to $0.051/kWh during high demand periods. Learn more about pricing here. Generation is recorded monthly through metering equipment installed by TVA and paid for by the participant. All energy output, Renewable Energy Credits (RECs), or other environmental attributes from installations under this

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program belong to TVA, and all marketing of the program should indicate that TVA (not the power seller) consumes all of the energy from these renewable energy projects. Biomass, Wind, or Photovoltaics can be interconnected through either TVA's transmission system or partners' distribution systems under 10, 15, or 20 year contracts. Biomass should co-fire 50% or more with the fuel consumption content approved by TVA and separately metered. The remainder of the biomass production can be purchased through the TVA's Dispersed Power Production Program. Before approval, the seller must provide TVA with project financing arrangements, interconnection agreements between the seller and either TVA or a Distributor, and TVA metering installation plans at an environmentally acceptable location. The participating power producer is responsible for interconnection, performance assurance, and application costs. TVA, or an approved third party, will also perform an environmental review at the seller’s cost.

16. TVA- Solar Solutions Initiative a. Solar Solutions Initiative (SSI) is a pilot program that offers additional

financial incentives for Solar PV systems participating in the Renewable Standard Offer program. Applications for new projects for the year 2015 will open on January 2, 2015. Participants applying for the Solar Solutions Incentive program are required to apply through the Renewable Standard Offer program. The program offers performance-based incentive of $0.04/kWh for the first 10 years after the project is operational. This incentive is additional to the seasonal and time-of-day price for electricity offered through the Renewable Standard Offer program. The total capacity for the program for the year 2015 is capped at 20 MW with set aside of 12 MW for traditional SSI participants, 4 MW for projects between 50kW- 200kW and 4MW for local power company participants. Aside from the 2015 capacity of 20MW, the program has offered total cumulative capacity of 36MW since its inception in 2012.

17. TVA- Green Power Providers a. Note: Enrollment for 2015 was conducted from January 26th to February

13th. b. Tennessee Valley Authority (TVA) and participating power distributors of

TVA power offer a performance-based incentive program to homeowners and businesses for the installation of renewable generation systems from the following qualifying resources: PV, wind, hydropower, and biomass. The long term Green Power Providers program replaces the Generation Partners* pilot program. The energy generated from these renewable generation systems will count towards TVA's green power pricing program, Green Power Switch. The Green Power Providers program contract term is 20 years. For years 1-10,

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TVA will purchase 100% of the output from qualifying systems at a premium of $0.02** per kilowatt-hour (kWh) on top of the retail electricity rate. Participants will be paid only the applicable retail rate for years 11-20 of the contract. Premium payments will be reviewed annually by TVA, with plans to phase these payments out over the life of the program. All new participants in the Generation Power Providers program will receive a $1,000 incentive to offset the upfront cost. Participation in the Generation Power Providers program is subject to annual limits imposed by TVA and based upon available budget, the value of renewable technologies to TVA and renewable energy market conditions. Eligible Systems must not have previously generated renewable energy for sale to TVA prior to October 1, 2012, unless the system was part of the Generation Partners pilot. TVA will retain all rights to all renewable energy credits and any other environmental attributes provided by system. Payment is made by either the Distributor Billing Option or the TVA-Vendor Direct Billing Option. With the Distributor Billing Option, a generation credit is issued by the local power company on the monthly power bill for the home or business where the generation system is located. If a qualifying system produces more electricity than the customer consumes, payment for any excess credits will be issued either monthly or annually, at the discretion of the power company. With the TVA-Vendor Direct Billing Option, participants receive the retail-rate portion of their monthly generation credit from the local power company and the premium rate is issued through a TVA-designated third party vendor. Qualifying systems will have a minimum total nameplate generation capacity (DC) of 500 watts (W) and a maximum of 50 kilowatts (kW). Systems over 50kW may qualify to participate in TVA’s Mid-Sized Renewable Standard Offer program (link to DSIRE summary). Systems greater than 10 kilowatts in size will be subject to a load requirement. A “load requirement” simply means that the system’s maximum capacity will be limited so that it should not generate more than 100% of the energy usage or consumption at the home or business. TVA will conduct annual program evaluations to set annual MW limits to the program. These limits will be made available on the Generation Power Providers web site. A limit of 11.33 MW limit including 4 MW of residential capacity and 7.33 MW of non-residential capacity is available for the program. Installations must comply with local codes and adhere to guidelines established by the program. All equipment must be in compliance with environmental regulations and national standards, certified by a licensed electrician, and meet all applicable codes. Systems must be dual-metered, have an external disconnect switch, be grid-tied, and be validated under an interconnection agreement.

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c. * Existing Generation Partners participants may qualify for a 10 year contract extension to be paid at retail prices.

d. **Prices reflect Premium Rates for 2015 Calendar Year and are applicable for agreements executed and dated by TVA on or after January 1, 2015 but on or prior to December 31, 2015.

18. South River EMC- Energy Efficiency Rebate Program a. South River EMC offers a variety of rebates encouragings its members to

invest in energy efficient appliances, equipment, and home upgrades. Incentives are available for a variety of energy efficient products, which must have been purchased within 90 days of the rebate application's submission. Be sure to check the program website listed above for detailed information on how to apply for these rebates and specific program requirements and guidelines. Contact South River EMC with any questions.

19. Duke Energy (Electric)- Non-Residential Energy Efficiency Rebate Program a. Duke Energy’s Smart $aver Incentive program offers rebates to non-

residential customers to install energy efficient equipment in their facilities. All Duke Energy North Carolina nonresidential electric customers are eligible, except those that have elected to opt out of the Energy Efficiency Rider. Rebates are available for a wide range of equipment including lighting, heating and cooling equipment, chillers and thermal storage units, motors, pumps, VFDs, process equipment, and food service equipment. All equipment must meet certain energy efficiency standards stated on the program web site. To receive the rebates, customers should submit a completed application within 90 days after the equipment is installed and operational. A list of frequently asked questions and the program application forms can be found on the program web site. Custom applications for up to 50% of cost on any electricity saving device can be sent to CustomIncentives@duke-energy.com. Three levels of energy assessments are available for commercial customers: online, over the phone, and on-site visits by an energy professional providing a report with paybacks. The on-site visits require a fee which can be recouped within the Smart $aver Incentives program; to begin, customers can contact businessservicecenter@duke-energy.com. Demand response programs are also available, providing rewards and load curtailment via a dedicated web portal for each commercial customer.

20. TVA- Energy Right Solutions for Business a. TVA offers the Energy Right Solutions Program to commercial and industrial

facilities. In addition to prescriptive rebates for lighting, motors, HVAC, and kitchen equipment, administrators take a custom baseline of pre-installation demand and compare to post installation measurements to determine the financial incentive amount in kilowatt-hour values. The incentives program is

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offered along with complimentary energy assessments and reviews to determine potential areas for savings. Customers can work with designers and installers to develop a project plan and complete a participation application form. Participants should receive a pre-installation incentive notification letter before removing any existing equipment.

21. Duke Energy Progress- Commercial and Industrial Energy- Efficiency Program a. Progress Energy provides rebates for energy efficiency measures in new

construction or retrofits, as well as Technical Assistance for feasibility/energy studies to commercial, industrial and government organizations. Incentives are based on prescriptive rebate amounts listed above or custom amounts based on annual kilowatt-hours (kWh) saved. Prescriptive rebate amounts are available on the program application forms on the Progress Energy web site listed above. A Custom Whole Building incentive for new construction modeled 10% beyond applicable building code can receive $0.09 per annual kWh saved up to $0.14 per annual kWh saved for designs exceeding 20% beyond code. New buildings greater than 20,000 square feet and designed with a projected first-year electrical savings of at least 15% beyond the applicable building code can receive a design incentive of $.05 per kWh of projected first year savings, up to a maximum of $50,000, or a Building Energy Modeling Incentive up to $20,000, not to exceed the total cost of the modeling service., For retrofits to buildings that use over 500,000 kWh, customers can receive up to 50% of the cost of an energy or feasibility study or retro-commissioning up to $20,000 for a facility every three years. Once a project is identified, a pre-approval incentive application should be submitted to Progress Energy. Pre-approval is required for some lighting projects and all custom projects, and technical assistance and is strongly encouraged for all projects to reserve funding. Progress Energy should receive a final application and all required documentation within 90 days of project completion.

22. Randolph EMC- Commercial and Industrial Efficient Lighting Rebate Program a. Commercial and industrial members who upgrade to energy-efficient light

bulbs, which meet Randolph EMC’s standards, are eligible for a prescriptive incentive payment. The cooperative will provide a rebate of $0.30 for each watt saved by the lighting upgrade. Fixtures which have had older bulbs replaced by highly efficient ones are eligible for the rebate. Savings and resulting incentives from the new installation are calculated using a baseline energy usage established by the replaced fixtures. Rebate criteria are subject only to Randolph EMC standards. Contact a Randolph EMC representative for more information on this offering.

23. Tideland EMC- Weatherization Loan Program

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a. Tideland Electric Membership Cooperative (TEMC) is an electric cooperative that serves customers in Craven, Dare, Washington, Pamlico, Beaufort and Hyde counties. Home, farm and business owners are able to take advantage of TEMC's five percent-interest Weatherization Loan Program. This loan will cover the purchase and installation of energy efficient measures such as caulking, weather-stripping, HVAC measures, storm doors and equipment insulation for existing buildings. Heat pumps should meet the energy efficiency requirements as established by TEMC. Repayment terms vary by the loan amount. If the requested loan amount is a first or second Deed of Trust must secure $10,000 or more the loan. Loan recipients must have been a customer of TEMC and occupied the space for at least one year. For more information on how to apply for the loan and possible improvements eligible, see the program web site above.

Alabama (back to top) 1. USDA- Biorefinery Assistance Program

a. USDA Rural Development is offering loan guarantees for the development, construction, and retrofitting of commercial-scale biorefineries. Eligible borrowers include individuals, entities, Indian tribes, state or local governments, corporations, farm cooperatives or farm cooperative organizations, associations of agricultural producers, National Laboratories, institutions of higher education, rural electric cooperatives, public power entities, and consortium of any of these types of entities. Financed entities must provide at least 20% of the financing for eligible project costs, and applications for funding must include an independent feasibility study and technical assessment. Eligible project costs include the purchase and installation of equipment, construction or retrofitting costs, permit and licensing fees, working capital, land acquisition, and the costs of financing.The project must meet the following requirements:

i. Must be for the development and construction or the retrofitting of a commercial-scale biorefinery using an eligible technology

ii. Must use an eligible feedstock for the production of advanced biofuels and biobased products

iii. The majority of the production must be an advanced biofuels b. Eligible advanced biofuels include:

i. Biofuel derived from cellulose, hemicellulose, or lignin, or other fuels derived from cellulose

ii. Biofuel derived from sugar, starch, excluding ethanol derived from from corn kernel starch

iii. Biofuel derived from waste material, including crop residue, vegetative waste material, animal waste, food waste, and yard waste

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iv. Diesel fuel derived from renewable biomass, including vegetable oil and animal fat

v. Biogas, including landfill gas and sewage waste treatment gas, produced through the conversion of organic matter from renewable biomass

c. In 2014, "renewable chemicals" and "biofuels" were added to this program under the name of Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program to provide guaranteed loans for the development and construction of commercial-scale biorefineries or for the retrofitting of existing facilities using eligible technology for the development of advanced biofuels.

d. Congress allocated $75 million for FY 2009 and $245 million for FY 2010, in addition to up to $150 million in discretionary funds annually beginning in FY 2009. The American Taxpayer Relief Act of 2012 extended discretionary funding through FY 2013. For FY 2014, approximately $76 million in carry over budget will support a program level of approximately $181 million.

2. Business Energy Investment Tax Credit a. Note: IRS Notice 2015-4 included new certification requirements for small

wind turbines placed in service after January 26, 2015. Small wind turbines must now meet the performance and quality standards set forth by either the American Wind Energy Association Small Wind Turbine Performance and Safety Standard 9.1-2009 (AWEA), or the International Electrotechnical Commission 61400-1, 61400-12, and 61400-11 (IEC)

b. The federal business energy investment tax credit available under 26 USC § 48 was expanded significantly by the Energy Improvement and Extension Act of 2008 (H.R. 1424), enacted in October 2008. This law extended the duration -- by eight years -- of the existing credits for solar energy, fuel cells and microturbines; increased the credit amount for fuel cells; established new credits for small wind-energy systems, geothermal heat pumps, and combined heat and power (CHP) systems; allowed utilities to use the credits; and allowed taxpayers to take the credit against the alternative minimum tax (AMT), subject to certain limitations. The credit was further expanded by the American Recovery and Reinvestment Act of 2009, enacted in February 2009. In general, the following credits are available for eligible systems placed in service on or before December 31, 2016*:

i. Solar. The credit is equal to 30% of expenditures, with no maximum credit. Eligible solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. Hybrid solar lighting systems, which use solar energy to illuminate the inside

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of a structure using fiber-optic distributed sunlight, are eligible. Passive solar systems and solar pool-heating systems are not eligible.

ii. Fuel Cells. The credit is equal to 30% of expenditures, with no maximum credit. However, the credit for fuel cells is capped at $1,500 per 0.5 kilowatt (kW) of capacity. Eligible property includes fuel cells with a minimum capacity of 0.5 kW that have an electricity-only generation efficiency of 30% or higher. (Note that the credit for property placed in service before October 4, 2008, is capped at $500 per 0.5 kW.)

iii. Small Wind Turbines. The credit is equal to 30% of expenditures, with no maximum credit for small wind turbines placed in service after December 31, 2008. Eligible small wind property includes wind turbines up to 100 kW in capacity. (In general, the maximum credit is $4,000 for eligible property placed in service after October 3, 2008, and before January 1, 2009. The American Recovery and Reinvestment Act of 2009 removed the $4,000 maximum credit limit for small wind turbines.) Small wind turbines must meet the performance and quality standards set forth by either the American Wind Energy Association Small Wind Turbine Performance and Safety Standard 9.1-2009 (AWEA), or the International Electrotechnical Commission 61400-1, 61400-12, and 61400-11 (IEC)

iv. Geothermal Systems. The credit is equal to 10% of expenditures, with no maximum credit limit stated. Eligible geothermal energy property includes geothermal heat pumps and equipment used to produce, distribute or use energy derived from a geothermal deposit. For electricity produced by geothermal power, equipment qualifies only up to, but not including, the electric transmission stage. For geothermal heat pumps, this credit applies to eligible property placed in service after October 3, 2008. Note that the credit for geothermal property, with the exception of geothermal heat pumps, has no stated expiration date.

v. Microturbines. The credit is equal to 10% of expenditures, with no maximum credit limit stated (explicitly). The credit for microturbines is capped at $200 per kW of capacity. Eligible property includes microturbines up to two megawatts (MW) in capacity that have an electricity-only generation efficiency of 26% or higher.

vi. Combined Heat and Power (CHP). The credit is equal to 10% of expenditures, with no maximum limit stated. Eligible CHP property generally includes systems up to 50 MW in capacity that exceed 60% energy efficiency, subject to certain limitations and reductions for

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large systems. The efficiency requirement does not apply to CHP systems that use biomass for at least 90% of the system's energy source, but the credit may be reduced for less-efficient systems. This credit applies to eligible property placed in service after October 3, 2008.

c. In general, the original use of the equipment must begin with the taxpayer, or the system must be constructed by the taxpayer. The equipment must also meet any performance and quality standards in effect at the time the equipment is acquired. The energy property must be operational in the year in which the credit is first taken. Significantly, the American Recovery and Reinvestment Act of 2009 repealed a previous restriction on the use of the credit for eligible projects also supported by "subsidized energy financing." For projects placed in service after December 31, 2008, this limitation no longer applies. Businesses that receive other incentives are advised to consult with a tax professional regarding how to calculate this federal tax credit.

d. * A number of changes to this credit are scheduled to take effect for systems placed in service after December 31, 2016. The credit for equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat will decrease from 30% to 10%. The credit for geothermal heat pumps, hybrid solar lighting, small wind, fuel cells, microturbines, and combined heat and power systems will expire. The credit amount for equipment which uses geothermal energy to produce electricity will remain at 10%.

3. Renewable Electricity Production Tax Credit a. Note: In December 2014, The Tax Increase Prevention Act of 2014 extended

the expiration date for this tax credit to December 31, 2014. Projects that are not under construction prior to January 1, 2015, are ineligible for this credit. In March 2015, IRS Notice 2015-25 extended the Continuous Construction Test and Continuous Efforts Test (used to determine if a project commencing construction before the end of 2014 is eligible for the PTC) by 1 year to January 1, 2017.

b. The federal renewable electricity production tax credit (PTC) is an inflation-adjusted per-kilowatt-hour (kWh) tax credit for electricity generated by qualified energy resources and sold by the taxpayer to an unrelated person during the taxable year. Originally enacted in 1992, the PTC has been renewed and expanded numerous times, most recently by the American Recovery and Reinvestment Act of 2009 (H.R. 1 Div. B, Section 1101 & 1102) in February 2009 (often referred to as "ARRA"), the American Taxpayer Relief Act of 2012 (H.R. 8, Sec. 407) in January 2013, and the Tax Increase Prevention Act of 2014 (H.R. 5771, Sec. 155) in December 2014.

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c. The tax credit amount is $0.015 per kWh in 1993 dollars for some technologies and half of that amount for others. The amount is adjusted for inflation by multiplying the tax credit amount by the inflation adjustment factor for the calendar year in which the sale occurs, rounded to the nearest 0.1 cents. The Internal Revenue Service (IRS) publishes the inflation adjustment factor no later than April 1 each year in the Federal Registrar. (For 2014, the inflation adjustment factor used by the IRS is 1.5088.) The table below outlines the credit amount as it applies to different resource types. The table includes changes made by H.R. 8 in January 2013, and the inflation-adjusted credit amounts are current for the 2014 calendar year, as published in the IRS Notice 2014-36.

Resource Type Credit Amount

Wind $0.023/kWh

Closed-Loop Biomass

$0.023/kWh

Open-Loop Biomass

$0.011/kWh

Geothermal Energy $0.023/kWh

Landfill Gas $0.011/kWh

Municipal Solid Waste

$0.011/kWh

Qualified Hydroelectric

$0.011/kWh

Marine and Hydrokinetic

$0.011/kWh

d. The duration of the credit is generally 10 years after the date the facility is

placed in service, but there are two exceptions: i. open-loop biomass, geothermal, small irrigation hydro, landfill gas,

and municipal solid waste combustion facilities placed into service after October 22, 2004, and before enactment of the Energy Policy Act

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of 2005, on August 8, 2005, are only eligible for the credit for a 5-year period, and

ii. open-loop biomass facilities placed in service before October 22, 2004, are eligible for the 5-year period beginning January 1, 2005.

e. The credit is claimed by completing Form 8835, "Renewable Electricity Production Credit," and Form 3800, "General Business Credit." For more information, contact IRS Telephone Assistance for Businesses at 1-800-829-4933.

f. The Tax Increase Prevention Act of 2014 (H.R. 5771, Sec. 155) extended both the PTC and permission for PTC-eligible facilities to claim the Investment Tax Credit in lieu of the PTC through the end of 2014. (Prior to the legislation, the PTC had expired December 31, 2013.) Although not enacted until December 2014, the effective date is January 1, 2014, meaning any qualifying project that commenced construction at any point in 2014 is eligible to claim the PTC. The American Taxpayer Relief Act of 2012 revised the PTC by removing "placed in service" deadlines and replacing them with deadlines that use the commencing of construction as a basis for determining facility eligibility. It also contained language revising the definition of the term "municipal solid waste" to exclude "paper that is commonly recycled and which has been segregated from other solid waste.” The definition change for municipal solid waste applies to electricity produced and sold after the enactment date of the legislation (January 2, 2013) in taxable years ending after that date.

g. To claim the PTC, construction on an eligible project must have “commenced construction” prior to January 1, 2015. The IRS has issued guidance on how it will evaluate whether construction has commenced in IRS Notices 2013-29, 2013-60, 2014-46, and 2015-25 (please see the full text of these notices for complete information on determining the commencing of construction). The guidelines establish two methods—a “physical work” test and a 5% safe harbor (see sections below for details)—to determine when construction has begun on a qualified facility. Meeting the criteria of either method is sufficient to demonstrate that construction has commenced. Both methods require that a taxpayer make continuous progress towards completion once construction has begun by meeting the Continuous Construction Test (to satisfy the Physical Work Test) or the Continuous Efforts Test (to satisfy Safe Harbor). For projects beginning construction before the end of 2014 and placed in service before January 1, 2017, the facility will be considered to satisfy the Continuous Construction Test or the Continuous Efforts Test, regardless of the amount of physical work performed or the amount of costs paid or incurred (Notice 2015-25).

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h. The physical work test provides that a taxpayer may establish the beginning of construction by beginning "physical work of a significant nature.” The physical work test is based on the nature of the work performed rather than the cost of the work; if the work performed is of a significant nature, then “there is no fixed minimum amount of work or monetary or percentage threshold required to satisfy the Physical Work Test” (Notice 2014-46). Notice 2013-29 provides several examples of actions that constitute work of a significant nature, including:

i. for a facility that produces electricity from a wind turbine, the beginning of the excavation for the foundation, the setting of anchor bolts into the ground, or the pouring of the concrete pads of the foundation;

ii. physical work on a custom-designed transformer that steps up the voltage of electricity produced at the facility to the voltage needed for transmission; and

iii. beginning construction of roads integral to the activity performed by the facility including onsite roads used for moving materials to be processed (e.g., biomass) and roads for equipment to operate and maintain the facility.

i. Safe Harbor with respect to a facility is demonstrated by showing that 5% or more of the total cost of the facility was paid or incurred before January 1, 2015. If less than 5% of the total cost of the facility was paid or incurred prior to January 1, 2015, Safe Harbor is not fully satisfied; however, if a taxpayer paid or incurred at least 3%, the Safe Harbor may be satisfied and the PTC (or ITC) may be claimed with respect to some, but not all, of the individual facilities comprising the project. Specifically, “a taxpayer may claim the PTC or ITC on any number of individual facilities as long as the total aggregate cost of those individual facilities at the time the project is placed in service is not greater than 20 times the amount the taxpayer paid or incurred before” January 1, 2015 (Notice 2014-46)

4. USDA- Rural Energy for America Program (Energy Audit and Renewable Energy Development Assistance Program

a. Note: The U.S. Department of Agriculture's Rural Development periodically issues Notices of Solicitation of Applications for the Rural Energy for America Program (REAP) in the Federal Registry. The most recent solicitation for the REAP program was on December 29th, 2014 and can be viewed in the Federal Registry here.

b. The Renewable Energy for America Program (REAP) Energy Audit and Renewable Energy Development Assistance Program (EA/REDA) provides assistance to agricultural producers and rural small businesses for energy

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audits and renewable energy technical assistance including renewable energy site assessments. Applicants must submit separate applications for assistance, limited to one energy audit and one REDA per fiscal year. The maximum aggregate amount of an energy audit and REDA grant in a Federal fiscal year* is $100,000. In 2015, $2 Million in EA/REDA grant funding is available. Eligible project costs for eligible applicants includes salaries directly related to the project, travel expenses directly related to conducting energy audits or renewable energy development assistance, office supplies (e.g., paper, pens, file folders), administrative expenses, up to a maximum of 5 percent of the grant, which include but are not limited to utilities, office space, operation expenses of office and other project related equipment. Land grant colleges and universities are referred to above as schools, public universities, and institutions; K-12 schools are not eligible for this grant.

c. The 2014 Agricultural Act (2014 Farm Bill) authorized the Rural Energy for America Program with $50 Million in mandatory funding each fiscal year. USDA overhauled the Rural Energy for America Program although the core program remains largely the same. One major change includes a 3 tiered application structure including 1) total project costs of $80,000 or less, 2) total project costs more than $80,000 but less than $200,000, and, 3) total project costs of $200,000 or greater. Grant applications of $20,000 or less will compete in 5 competitions (Congress required 20% of funding to be used for small grants of $20,000 or less). The Food, Conservation, and Energy Act of 2008 (H.R. 2419), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program,* into the Rural Energy for America Program (REAP). Similar to its predecessor, REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the program in the following amounts: $55 million for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, up to $25 million in discretionary funding may be issued each year. The American Taxpayer Relief Act of 2012 (H.R. 8) extended discretionary funding for FY 2013.

5. USDA- Rural Energy for America Program (Grants) a. Note: The U.S. Department of Agriculture's Rural Development issues

periodic Notices of Solicitation of Applications for the Rural Energy for America Program (REAP) in the Federal Registry. The most recent

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solicitation for the REAP program was on May 5th, 2014 and can be viewed in the Federal Registry here. The next Notice of Funding Availability will be published in the Federal Registry and on the USDA website here. Notably, the 2014 Farm Bill removed authority for the USDA to fund REAP feasibility studies with REAP grants.

b. The Rural Energy for America Program (REAP) provides financial assistance to agricultural producers and rural small businesses in rural America to purchase, install, and construct renewable energy systems, make energy efficiency improvements to non-residential buildings and facilities, use renewable technologies that reduce energy consumption, and participate in energy audits and renewable energy development assistance. Renewable energy projects for the Renewable Energy Systems and Energy Efficiency Improvement Guaranteed Loan and Grant Program include wind, solar, biomass and geothermal, and hydrogen derived from biomass or water using wind, solar, or geothermal energy sources. These grants are limited to 25% of a proposed project's cost, and a loan guarantee may not exceed $25 million. The combined amount of a grant and loan guarantee must be at least $5,000 (with the grant portion at least $1,500) and may not exceed 75% of the project’s cost. In general, a minimum of 20% of the funds available for these incentives will be dedicated to grants of $20,000 or less. For more information on grant, loan guarantees, loan financing, and opportunities for combinations thereof, visit the USDA website. In 2014, $12.3 million in grants and $56.4 million in loans was awarded. For a complete list of 2014 projects.

c. Grants and loans are generally available to state government entities, local governments, tribal governments, land-grant colleges and universities**, rural electric cooperatives and public power entities, and other entities, as determined by the USDA. To be eligible for REAP grants and loans, an applicant must have a satisfactory revenue stream and be in control the budget, operations, and maintenance of a project for the entire duration of the loan or grant. Rural small businesses must be located in rural areas, but agricultural producers may be located in non-rural areas. Eligible project costs include purchasing energy efficiency improvements or a renewable energy system, energy audits or assessments, permitting and licensing fees, and business plans and retrofitting. For new construction the replacement of older equipment with more efficient equipment may be eligible as a project cost only when a new facility is planned to be more efficient and similarly sized than the older facility. Working capital and land acquisition are only eligible for loan guarantees. Regional rural energy coordinators provide loan and grant applications upon request.

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d. The Food, Conservation, and Energy Act of 2008 (H.R. 2419), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program,* into the Rural Energy for America Program (REAP). Similar to its predecessor, the REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the new program in the following amounts: $55 million for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, up to $25 million in discretionary funding may be issued each year. The American Taxpayer Relief Act of 2012 (H.R. 8) extended discretionary funding for FY 2013. The 2014 Farm Bill reauthorized the USDA to offer these programs and removed the mandate to offer grants for feasibility studies.

e. * The Renewable Energy Systems and Energy Efficiency Improvements Program was created by the USDA pursuant to Section 9006 of the 2002 federal Farm Security and Rural Investment Act of 2002. Funding in the amount of $23 million per year was appropriated for each fiscal year from FY 2003-2007. In March 2008, the USDA announced that it would accept $220.9 million in applications for grants, loan guarantees, and loan/grant combination packages under the Renewable Energy Systems and Energy Efficiency Improvements Program. The application deadline was June 16, 2008.

f. **Land grant colleges and universities are referred to above as "schools" and "institutions". It is important to note that K-12 schools are not eligible for this grant.

6. USDA- Rural Energy for America Program (Loan Guarantees) a. Note: The U.S. Department of Agriculture's Rural Development issues

periodic Notices of Solicitation of Applications for the Rural Energy for America Program (REAP) in the Federal Registry. The most recent solicitation for the REAP program was on May 5th, 2014 and can be viewed in the Federal Registry here. The next Notice of Funding Availability will be published in the Federal Registry and on the USDA website here. Notably, the 2014 Farm Bill removed authority for the USDA to fund REAP feasibility studies with REAP grants.

b. The Rural Energy for America Program (REAP) provides financial assistance to agricultural producers and rural small businesses in rural America to purchase, install, and construct renewable energy systems, make energy

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efficiency improvements to non-residential buildings and facilities, use renewable technologies that reduce energy consumption, and participate in energy audits and renewable energy development assistance. Renewable energy projects for the Renewable Energy Systems and Energy Efficiency Improvement Guaranteed Loan and Grant Program include wind, solar, biomass and geothermal, and hydrogen derived from biomass or water using wind, solar, or geothermal energy sources. These grants are limited to 25% of a proposed project's cost, and a loan guarantee may not exceed $25 million. The combined amount of a grant and loan guarantee must be at least $5,000 (with the grant portion at least $1,500) and may not exceed 75% of the project’s cost. In general, a minimum of 20% of the funds available for these incentives will be dedicated to grants of $20,000 or less. For more information on grant, loan guarantees, loan financing, and opportunities for combinations thereof, visit the USDA website. In 2014, $12.3 million in grants and $56.4 million in loans was awarded. For a complete list of 2014 projects, click here.

c. Grants and loans are generally available to state government entities, local governments, tribal governments, land-grant colleges and universities**, rural electric cooperatives and public power entities, and other entities, as determined by the USDA. To be eligible for REAP grants and loans, an applicant must have a satisfactory revenue stream and be in control the budget, operations, and maintenance of a project for the entire duration of the loan or grant. Rural small businesses must be located in rural areas, but agricultural producers may be located in non-rural areas. Eligible project costs include purchasing energy efficiency improvements or a renewable energy system, energy audits or assessments, permitting and licensing fees, and business plans and retrofitting. For new construction the replacement of older equipment with more efficient equipment may be eligible as a project cost only when a new facility is planned to be more efficient and similarly sized than the older facility. Working capital and land acquisition are only eligible for loan guarantees. Regional rural energy coordinators provide loan and grant applications upon request.

d. The Food, Conservation, and Energy Act of 2008 (H.R. 2419), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program,* into the Rural Energy for America Program (REAP). Similar to its predecessor, the REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the new program in the following amounts: $55 million

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for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, up to $25 million in discretionary funding may be issued each year. The American Taxpayer Relief Act of 2012 (H.R. 8) extended discretionary funding for FY 2013. The 2014 Farm Bill reauthorized the USDA to offer these programs and removed the mandate to offer grants for feasibility studies.

e. * The Renewable Energy Systems and Energy Efficiency Improvements

Program was created by the USDA pursuant to Section 9006 of the 2002 federal Farm Security and Rural Investment Act of 2002. Funding in the amount of $23 million per year was appropriated for each fiscal year from FY 2003-2007. In March 2008, the USDA announced that it would accept $220.9 million in applications for grants, loan guarantees, and loan/grant combination packages under the Renewable Energy Systems and Energy Efficiency Improvements Program. The application deadline was June 16, 2008.

f. **Land grant colleges and universities are referred to above as "schools"

and "institutions". It is important to note that K-12 schools are not eligible for this grant.

7. USDA- Repowering Assistance Biorefinery Program a. The Repowering Assistance Program provides payments to eligible

biorefineries to replace fossil fuels used to produce heat or power to operate the biorefineries with renewable biomass. Reimbursement payments are provided to offset a portion of the costs associated with the conversion of existing fossil fuel systems to renewable biomass fuel systems. The reimbursement amounts vary and are determined by the availability of funds, the project scope, and the ability of the proposed project to meet all the scoring criteria. In particular reimbursement amounts are calculated by the percentage reduction in fossil fuel used by the biorefinery, the quantity of fossil fuels replaced by a renewable biomass system, and the cost effectiveness of the renewable biomass system. The program will provide reimbursement payments for eligible project costs of the renewable biomass system during the construction phase of the repowering project. Up to 90% of the funds can be utilized during project construction, with the remaining 10% made upon demonstration of successful completion of the project. A maximum of 50% of the total project costs can be reimbursed, as long as amount does not exceed the maximum award for the fiscal year.

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b. Eligible technologies may include, but are not limited to, anaerobic digesters, processed steam, biomass boilers, or combined heat and power technologies (CHP). Applicants must demonstrate, at the time of application, that the proposed site has direct access to biomass or third party commitments to supply biomass for the repowering project for at least three years. Payments are made for eligible post-application costs incurred during the construction phase of the repowering project. Congress allocated $35 million for FY 2009, in addition to up to $15 million in discretionary funds annually beginning in FY 2009. The American Taxpayer Relief Act of 2012 extended discretionary funding through FY 2013.

8. Modified Accelerated Cost- Recovery System a. Note: Sec. 125 of H.R. 5771, the Tax Increase Prevention Act of 2014,

extended the "placed in service" date of the 50% bonus depreciation provision originally included in the American Recovery and Reinvestment Act of 2009 to December 31, 2014, and thus retroactively through the 2014 tax year.

b. Under the federal Modified Accelerated Cost-Recovery System (MACRS), businesses may recover investments in certain property through depreciation deductions. The MACRS establishes a set of class lives for various types of property, ranging from three to 50 years, over which the property may be depreciated. A number of renewable energy technologies are classified as five-year property (26 USC § 168(e)(3)(B)(vi)) under the MACRS, which refers to 26 USC § 48(a)(3)(A), often known as the energy investment tax credit or ITC to define eligible property. Such property currently includes*:

i. a variety of solar-electric and solar-thermal technologies ii. fuel cells and microturbines

iii. geothermal electric iv. direct-use geothermal and geothermal heat pumps v. small wind (100 kW or less)

vi. combined heat and power (CHP) vii. the provision which defines ITC technologies as eligible also adds the

general term "wind" as an eligible technology, extending the five-year schedule to large wind facilities as well.

c. In addition, for certain other types of renewable energy property, such as biomass or marine and hydrokinetic property, the MACRS property class life is seven years. Eligible biomass property generally includes assets used in the conversion of biomass to heat or to a solid, liquid or gaseous fuel, and to equipment and structures used to receive, handle, collect and process biomass in a waterwall, combustion system, or refuse-derived fuel system to create hot water, gas, steam and electricity. Marine and hydrokinetic property includes facilities that utilize waves, tides, currents, free-flowing water, or differentials

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in ocean temperature to generate energy. It does not include traditional hydropower that uses dams, diversionary structures, or impoundments. The 5-year schedule for most types of solar, geothermal, and wind property has been in place since 1986. The federal Energy Policy Act of 2005 (EPAct 2005) classified fuel cells, microturbines and solar hybrid lighting technologies as five-year property as well by adding them to § 48(a)(3)(A). This section was further expanded in October 2008 by the addition of geothermal heat pumps, combined heat and power, and small wind under The Energy Improvement and Extension Act of 2008.

d. The federal Economic Stimulus Act of 2008, enacted in February 2008, included a 50% first-year bonus depreciation (26 USC § 168(k)) provision for eligible renewable-energy systems acquired and placed in service in 2008. The allowance for bonus depreciation has since been extended and modified several times since the original enactment, most recently in December 2014 by the Tax Increase Prevention Act Of 2014 (H.R. 5771, Sec. 125). This legislation extended the "in-service" provision for qualifying property through to December 31, 2014, and thus also did so retroactively for property placed in service after December 31, 2013, through to enactment.

e. The 50% first-year bonus depreciation provision enacted in 2008 was extended (retroactively for the entire 2009 tax year) under the same terms by the American Recovery and Reinvestment Act of 2009 (H.R. 1), enacted in February 2009. It was renewed again in September 2010 (retroactively for the entire 2010 tax year) by the Small Business Jobs Act of 2010 (H.R. 5297). In December 2010 the provision for bonus depreciation was amended and extended yet again by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (H.R. 4853). Under these amendments, eligible property placed in service after September 8, 2010 and before January 1, 2012 was permitted to qualify for 100% first-year bonus depreciation. The December 2010 amendments also permitted bonus depreciation to be claimed for property placed in service during 2012, but reverted the allowable amount from 100% to 50% of the eligible basis. The 50% first-year bonus depreciation allowance was further extended for property placed in service during 2013 by the American Taxpayer Relief Act of 2012 (H.R. 8, Sec. 331) in January 2013. As noted above, the Tax Increase Prevention Act Of 2014 (H.R. 5771, Sec. 125), extended these provisions through to December 31, 2014, and thus retroactively for the 2014 tax year.

f. *Note that the definitions of eligible technologies included in this entry are somewhat simplified versions of those contained in tax code, which often contain additional caveats, restrictions, and modifications. Those interested in

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this incentive should review the relevant sections of the code in detail prior to making business decisions.

9. Energy- Efficient Commercial Building Tax Deduction a. Note: This tax deduction expired at the end of 2013. The Tax Increase

Prevention Act of 2014 retroactively reinstated the tax credit for projects completed in 2014.

b. The federal Energy Policy Act of 2005 established a tax deduction for energy-efficient commercial buildings applicable to qualifying systems and buildings placed in service from January 1, 2006, through December 31, 2007. This deduction was subsequently extended through 2008, and then again through 2013 by Section 303 of the federal Energy Improvement and Extension Act of 2008 (H.R. 1424, Division B), enacted in October 2008. A tax deduction of $1.80 per square foot is available to owners of new or existing buildings who install (1) interior lighting; (2) building envelope, or (3) heating, cooling, ventilation, or hot water systems that reduce the building’s total energy and power cost by 50% or more in comparison to a building meeting minimum requirements set by ASHRAE Standard 90.1-2001. Energy savings must be calculated using qualified computer software approved by the IRS. Click here for the list of approved software. Deductions of $0.60 per square foot are available to owners of buildings in which individual lighting, building envelope, or heating and cooling systems meet target levels that would reasonably contribute to an overall building savings of 50% if additional systems were installed. The deductions are available primarily to building owners, although tenants may be eligible if they make construction expenditures. In the case of energy efficient systems installed on or in government property, tax deductions will be awarded to the person primarily responsible for the system's design. Deductions are taken in the year when construction is completed. The IRS released interim guidance (IRS Notice 2006-52) in June 2006 to establish a process to allow taxpayers to obtain a certification that the property satisfies the energy efficiency requirements contained in the statute. IRS Notice 2008-40 was issued in March of 2008 to further clarify the rules. NREL published a report (NREL/TP-550-40228) in February 2007 which provides guidelines for the modeling and inspection of energy savings required by the statute.

10. USDA- High Energy Cost Grant Program a. NOTE: The most recent solicitation for this program closed August 1, 2014.

Please check the program website for information on future solicitations. b. The U.S. Department of Agriculture (USDA) offers an ongoing grant program

for the improvement of energy generation, transmission, and distribution facilities in rural communities. This program began in 2000. Eligibility is

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limited to projects in communities that have average home energy costs at least 275% above the national average. Individuals, non-profits, commercial entities, state and local governments (including any agency or instrumentality thereof), and tribal governments are eligible for this grant. Individuals must work on a project that will benefit the community in order to qualify. Under the most recent solicitation for projects, a total of $7 million was available for qualifying projects. Under this solicitation grants ranging from $50,000 to $3 million were available for a variety of activities, including:

i. Electric generation, transmission, and distribution facilities; ii. Natural gas or petroleum storage or distribution facilities;

iii. Renewable energy facilities used for on-grid or off-grid electric power generation, water or space heating, or process heating and power;

iv. Backup up or emergency power generation or energy storage equipment; and

v. Weatherization of residential and community property, or other energy efficiency or conservation programs.

c. This grant program is not limited to renewable energy or energy conservation and efficiency measures, but these measures are eligible for this grant program.

11. AlabamaSAVES Revolving Loan Program a. The Alabama Department of Economic and Community Affairs (ADECA)

offers an energy efficiency and renewable energy revolving loan fund called AlabamaSAVES. The funds are available to businesses and industries located in Alabama for retrofitting existing facilities. A variety of technologies are eligible; see the program technical guide for full details. In order to apply, interested parties must first contact an AlabamaSaves representative. Upon receiving and submitting the necessary paperwork, a consultation on financing and next steps is scheduled. The Loan Application formalizes the request for a subsidy or direct loan. The process requires that an energy assessment, defining the project and estimated energy savings impact, be submitted and reviewed to ensure a simple payback of 10 years or better. The program operates as a revolving loan program where the fund is replenished by interest and principal repayments made on prior loans and as a loan subsidy program enabling low cost loans from private lenders through credit enhancements – interest rate buydowns and loan loss reserves. The fund was initially capitalized with American Recovery and Reinvestment Act (ARRA) funding. Please see the program web site for additional information and program materials.

12. TVA- Mid-Sized Renewable Standard Offer Program

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a. The Tennessee Valley Authority (TVA) now compliments the small generation Green Power Providers Program by providing incentives for mid-sized renewable energy generators between 50kW and 20MW to enter into long term price contracts. The goal for total production from all participants is 100MW, with no more than 50MW from any one renewable technology. The Renewable Standard Offer program also includes Solar Solution Initiative program that offers additional financial incentives for Solar Photovoltaic (PV) projects. TVA bases the standard offer for customer generators off of a seasonal time-of-day averages chart, which sets base prices for the term of the contract. For projects approved after January 2015, prices increase at a rate of 5% per year beginning in 2016 and may be changed with 90 days’ notice by TVA (no more than 1% per year). For 2015, the average price is expected range between $0.029/kWh during low demand periods to $0.051/kWh during high demand periods. Learn more about pricing here. Generation is recorded monthly through metering equipment installed by TVA and paid for by the participant. All energy output, Renewable Energy Credits (RECs), or other environmental attributes from installations under this program belong to TVA, and all marketing of the program should indicate that TVA (not the power seller) consumes all of the energy from these renewable energy projects. Biomass, Wind, or Photovoltaics can be interconnected through either TVA's transmission system or partners' distribution systems under 10, 15, or 20 year contracts. Biomass should co-fire 50% or more with the fuel consumption content approved by TVA and separately metered. The remainder of the biomass production can be purchased through the TVA's Dispersed Power Production Program. Before approval, the seller must provide TVA with project financing arrangements, interconnection agreements between the seller and either TVA or a Distributor, and TVA metering installation plans at an environmentally acceptable location. The participating power producer is responsible for interconnection, performance assurance, and application costs. TVA, or an approved third party, will also perform an environmental review at the seller’s cost.

13. TVA- Energy Rights Solutions for Business a. TVA offers the Energy Right Solutions Program to commercial and industrial

facilities. In addition to prescriptive rebates for lighting, motors, HVAC, and kitchen equipment, administrators take a custom baseline of pre-installation demand and compare to post installation measurements to determine the financial incentive amount in kilowatt-hour values. The incentives program is offered along with complimentary energy assessments and reviews to determine potential areas for savings. Customers can work with designers and installers to develop a project plan and complete a participation application

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form. Participants should receive a pre-installation incentive notification letter before removing any existing equipment.

14. TVA- Solar Solutions Initiative a. Solar Solutions Initiative (SSI) is a pilot program that offers additional

financial incentives for Solar PV systems participating in the Renewable Standard Offer program. Applications for new projects for the year 2015 will open on January 2, 2015. Participants applying for the Solar Solutions Incentive program are required to apply through the Renewable Standard Offer program. The program offers performance-based incentive of $0.04/kWh for the first 10 years after the project is operational. This incentive is additional to the seasonal and time-of-day price for electricity offered through the Renewable Standard Offer program. The total capacity for the program for the year 2015 is capped at 20 MW with set aside of 12 MW for traditional SSI participants, 4 MW for projects between 50kW- 200kW and 4MW for LPC participants. Aside from the 2015 capacity of 20MW, the program has offered total cumulative capacity of 36MW since its inception in 2012.

15. TVA- Green Power Providers a. Note: Enrollment for 2015 was conducted from January 26th to February

13th. b. Tennessee Valley Authority (TVA) and participating power distributors of

TVA power offer a performance-based incentive program to homeowners and businesses for the installation of renewable generation systems from the following qualifying resources: PV, wind, hydropower, and biomass. The long term Green Power Providers program replaces the Generation Partners* pilot program. The energy generated from these renewable generation systems will count towards TVA's green power pricing program, Green Power Switch. The Green Power Providers program contract term is 20 years. For years 1-10, TVA will purchase 100% of the output from qualifying systems at a premium of $0.02** per kilowatt-hour (kWh) on top of the retail electricity rate. Participants will be paid only the applicable retail rate for years 11-20 of the contract. Premium payments will be reviewed annually by TVA, with plans to phase these payments out over the life of the program. All new participants in the Generation Power Providers program will receive a $1,000 incentive to offset the upfront cost. Participation in the Generation Power Providers program is subject to annual limits imposed by TVA and based upon available budget, the value of renewable technologies to TVA and renewable energy market conditions. Eligible Systems must not have previously generated renewable energy for sale to TVA prior to October 1, 2012, unless the system was part of the Generation Partners pilot. TVA will retain all rights to all

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renewable energy credits and any other environmental attributes provided by system. Payment is made by either the Distributor Billing Option or the TVA-Vendor Direct Billing Option. With the Distributor Billing Option, a generation credit is issued by the local power company on the monthly power bill for the home or business where the generation system is located. If a qualifying system produces more electricity than the customer consumes, payment for any excess credits will be issued either monthly or annually, at the discretion of the power company. With the TVA-Vendor Direct Billing Option, participants receive the retail-rate portion of their monthly generation credit from the local power company and the premium rate is issued through a TVA-designated third party vendor. Qualifying systems will have a minimum total nameplate generation capacity (DC) of 500 watts (W) and a maximum of 50 kilowatts (kW). Systems over 50kW may qualify to participate in TVA’s Mid-Sized Renewable Standard Offer program (link to DSIRE summary). Systems greater than 10 kilowatts in size will be subject to a load requirement. A “load requirement” simply means that the system’s maximum capacity will be limited so that it should not generate more than 100% of the energy usage or consumption at the home or business. TVA will conduct annual program evaluations to set annual MW limits to the program. These limits will be made available on the Generation Power Providers web site. A limit of 11.33 MW limit including 4 MW of residential capacity and 7.33 MW of non-residential capacity is available for the program. Installations must comply with local codes and adhere to guidelines established by the program. All equipment must be in compliance with environmental regulations and national standards, certified by a licensed electrician, and meet all applicable codes. Systems must be dual-metered, have an external disconnect switch, be grid-tied, and be validated under an interconnection agreement.

c. * Existing Generation Partners participants may qualify for a 10-year contract extension to be paid at retail prices.

d. **Prices reflect Premium Rates for 2015 Calendar Year and are applicable for agreements executed and dated by TVA on or after January 1, 2015 but on or prior to December 31, 2015. Premium amounts are annually published in the Green Power Provider Guidelines.

Florida (back to top) 1. Renewable Energy Production Tax Credit

a. In June 2006, S.B. 888 established a renewable energy production tax credit to encourage the development and expansion of renewable energy facilities in Florida. The credit was allowed to expire in 2010. In April 2012, H.B. 7117 re-established and updated the renewable energy production tax credit. This summary describes the current version of the credit. This annual corporate tax

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credit is equal to $0.01 per kilowatt-hour (kWh) of electricity produced and sold by the taxpayer to an unrelated party during a given tax year. For new facilities (placed in service after May 1, 2012) the credit is based on the sale of the facility's entire electrical production. For an expanded facility,* the credit is based on the increases in the facility's electrical production that are achieved after May 1, 2012. For the purposes of this credit, renewable energy is defined as “electrical, mechanical, or thermal energy produced from a method that uses one or more of the following fuels or energy sources: hydrogen, biomass, solar energy, geothermal energy, wind energy, ocean energy, waste heat, or hydroelectric power.” The credit may be claimed for electricity produced and sold on or after January 1, 2013, and June 30, 2016. Beginning in 2014 and continuing until 2017, each taxpayer claiming a credit under this section must apply to the Department of Agriculture and Consumer Services each year for an allocation of available credit. If the credit granted is not fully used in one year because of insufficient tax liability, the unused amount may be carried forward for up to 5 years. The combined total amount of tax credits which may be granted for all taxpayers under this program is limited to $5 million for fiscal year 2012/2013, and $10 million per year for the remaining fiscal years. If the amount of credits applied for each year exceeds the cap established for that year, the Florida Department of Agriculture and Consumer Services will award credits to qualified applicants based on the following priority:

i. New facilities placed in operation post May 1, 2012 (up to $250,000 maximum)

ii. Facilities not able to claim credits under Priority 1 and which claim a credit of $50,000 or less

iii. Facilities not able to claim credits under Priority 1 or Priority 2 b. For all Priority levels, credits allocated will be prorated based upon applicants

unallocated claims for qualified production and sales. A taxpayer cannot claim both this production tax credit and Florida’s Renewable Energy Technologies Investment Tax Credit. In June 2008, Florida enacted H.B. 7135, which specified that a taxpayer's use of the credit does not reduce the amount of the Florida alternative minimum tax available to the taxpayer. Tax credits may be transferable to to an eligible entity after a merger or acquisition. Credits must be used in the same manner and with the same limitations and can only be transferred to a surviving or acquiring entity once. The Florida Department of Agriculture and Consumer Services is responsible for ensuring that the corporate income tax credit granted does not exceed limitations outlined in H.B. 7117 and is charged with making available on its web site tax credit

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balances. The Florida Department of Revenue is authorized to audit and investigate tax credit paperwork and claims.

c. * An "expanded facility" is a Florida renewable energy facility that increases its electrical production and sale by more than 5% above the facility's electrical production and sale during the 2011 calendar year.

2. USDA- Biorefinery Assistance Program a. USDA Rural Development is offering loan guarantees for the development,

construction, and retrofitting of commercial-scale biorefineries. Eligible borrowers include individuals, entities, Indian tribes, state or local governments, corporations, farm cooperatives or farm cooperative organizations, associations of agricultural producers, National Laboratories, institutions of higher education, rural electric cooperatives, public power entities, and consortium of any of these types of entities. Financed entities must provide at least 20% of the financing for eligible project costs, and applications for funding must include an independent feasibility study and technical assessment. Eligible project costs include the purchase and installation of equipment, construction or retrofitting costs, permit and licensing fees, working capital, land acquisition, and the costs of financing.

b. The project must meet the following requirements: i. Must be for the development and construction or the retrofitting of a

commercial-scale biorefinery using an eligible technology ii. Must use an eligible feedstock for the production of advanced biofuels

and biobased products iii. The majority of the production must be an advanced biofuels

c. Eligible advanced biofuels include: i. Biofuel derived from cellulose, hemicellulose, or lignin, or other fuels

derived from cellulose ii. Biofuel derived from sugar, starch, excluding ethanol derived from

from corn kernel starch iii. Biofuel derived from waste material, including crop residue,

vegetative waste material, animal waste, food waste, and yard waste iv. Diesel fuel derived from renewable biomass, including vegetable oil

and animal fat v. Biogas, including landfill gas and sewage waste treatment gas,

produced through the conversion of organic matter from renewable biomass

d. In 2014, "renewable chemicals” and "biofuels" were added to this program under the name of Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program to provide guaranteed loans for the development and construction of commercial-scale biorefineries or for the

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retrofitting of existing facilities using eligible technology for the development of advanced biofuels. Congress allocated $75 million for FY 2009 and $245 million for FY 2010, in addition to up to $150 million in discretionary funds annually beginning in FY 2009. The American Taxpayer Relief Act of 2012 extended discretionary funding through FY 2013. For FY 2014, approximately $76 million in carry over budget will support a program level of approximately $181 million.

e. Forms must be submitted by January 30th of each program year to compete for funds.

3. Business Energy Investment Tax Credit a. Note: IRS Notice 2015-4 included new certification requirements for small

wind turbines placed in service after January 26, 2015. Small wind turbines must now meet the performance and quality standards set forth by either the American Wind Energy Association Small Wind Turbine Performance and Safety Standard 9.1-2009 (AWEA), or the International Electrotechnical Commission 61400-1, 61400-12, and 61400-11 (IEC)

b. The federal business energy investment tax credit available under 26 USC § 48 was expanded significantly by the Energy Improvement and Extension Act of 2008 (H.R. 1424), enacted in October 2008. This law extended the duration -- by eight years -- of the existing credits for solar energy, fuel cells and microturbines; increased the credit amount for fuel cells; established new credits for small wind-energy systems, geothermal heat pumps, and combined heat and power (CHP) systems; allowed utilities to use the credits; and allowed taxpayers to take the credit against the alternative minimum tax (AMT), subject to certain limitations. The credit was further expanded by the American Recovery and Reinvestment Act of 2009, enacted in February 2009.

c. In general, the following credits are available for eligible systems placed in service on or before December 31, 2016*:

i. Solar. The credit is equal to 30% of expenditures, with no maximum credit. Eligible solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. Hybrid solar lighting systems, which use solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight, are eligible. Passive solar systems and solar pool-heating systems are not eligible.

ii. Fuel Cells. The credit is equal to 30% of expenditures, with no maximum credit. However, the credit for fuel cells is capped at $1,500 per 0.5 kilowatt (kW) of capacity. Eligible property includes fuel cells with a minimum capacity of 0.5 kW that have an electricity-only generation efficiency of 30% or higher. (Note that the credit for

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property placed in service before October 4, 2008, is capped at $500 per 0.5 kW.)

iii. Small Wind Turbines. The credit is equal to 30% of expenditures, with no maximum credit for small wind turbines placed in service after December 31, 2008. Eligible small wind property includes wind turbines up to 100 kW in capacity. (In general, the maximum credit is $4,000 for eligible property placed in service after October 3, 2008, and before January 1, 2009. The American Recovery and Reinvestment Act of 2009 removed the $4,000 maximum credit limit for small wind turbines.) Small wind turbines must meet the performance and quality standards set forth by either the American Wind Energy Association Small Wind Turbine Performance and Safety Standard 9.1-2009 (AWEA), or the International Electrotechnical Commission 61400-1, 61400-12, and 61400-11 (IEC)

iv. Geothermal Systems. The credit is equal to 10% of expenditures, with no maximum credit limit stated. Eligible geothermal energy property includes geothermal heat pumps and equipment used to produce, distribute or use energy derived from a geothermal deposit. For electricity produced by geothermal power, equipment qualifies only up to, but not including, the electric transmission stage. For geothermal heat pumps, this credit applies to eligible property placed in service after October 3, 2008. Note that the credit for geothermal property, with the exception of geothermal heat pumps, has no stated expiration date.

v. Microturbines. The credit is equal to 10% of expenditures, with no maximum credit limit stated (explicitly). The credit for microturbines is capped at $200 per kW of capacity. Eligible property includes microturbines up to two megawatts (MW) in capacity that have an electricity-only generation efficiency of 26% or higher.

vi. Combined Heat and Power (CHP). The credit is equal to 10% of expenditures, with no maximum limit stated. Eligible CHP property generally includes systems up to 50 MW in capacity that exceed 60% energy efficiency, subject to certain limitations and reductions for large systems. The efficiency requirement does not apply to CHP systems that use biomass for at least 90% of the system's energy source, but the credit may be reduced for less-efficient systems. This credit applies to eligible property placed in service after October 3, 2008.

d. In general, the original use of the equipment must begin with the taxpayer, or the system must be constructed by the taxpayer. The equipment must also

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meet any performance and quality standards in effect at the time the equipment is acquired. The energy property must be operational in the year in which the credit is first taken. Significantly, the American Recovery and Reinvestment Act of 2009 repealed a previous restriction on the use of the credit for eligible projects also supported by "subsidized energy financing." For projects placed in service after December 31, 2008, this limitation no longer applies. Businesses that receive other incentives are advised to consult with a tax professional regarding how to calculate this federal tax credit.

e. * A number of changes to this credit are scheduled to take effect for systems placed in service after December 31, 2016. The credit for equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat will decrease from 30% to 10%. The credit for geothermal heat pumps, hybrid solar lighting, small wind, fuel cells, microturbines, and combined heat and power systems will expire. The credit amount for equipment which uses geothermal energy to produce electricity will remain at 10%.

4. Solar and CHP Sales Tax Exemption a. Solar energy systems have been exempt from Florida's sales and use tax since

July 1, 1997. The term "solar energy system" means the equipment and requisite hardware that provide and are used for collecting, transferring, converting, storing or using incidental solar energy for water heating, space heating and cooling, or other applications that would otherwise require the use of a conventional source of energy such as petroleum products, natural gas, manufactured gas or electricity. This exemption was originally set to expire July 1, 2002, but it was extended for three more three years. In May 2005, the exemption was made permanent upon the enactment of H.B. 805. The Florida Solar Energy Center certifies to the Florida Department of Revenue a list of eligible equipment and hardware. Sellers of solar energy systems or components thereof are required to document exempt sales. The Florida Department of Revenue recommends that the purchaser complete this form and present it to the seller. In addition, the exemption applies to machinery and equipment used at a fixed location for the purpose of producing electrical or steam energy resulting from the burning of boiler fuels other than residual oil. However, such energy must be primarily used for manufacturing, processing, compounding or producing for sale items of tangible personal property in Florida. In facilities where machinery and equipment are necessary to burn both residual and non-residual fuels, the exemption is prorated.

5. Renewable Electricity Production Tax Credit

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a. Note: In December 2014, The Tax Increase Prevention Act of 2014 extended the expiration date for this tax credit to December 31, 2014. Projects that are not under construction prior to January 1, 2015, are ineligible for this credit. In March 2015, IRS Notice 2015-25 extended the Continuous Construction Test and Continuous Efforts Test (used to determine if a project commencing construction before the end of 2014 is eligible for the PTC) by 1 year to January 1, 2017.

b. The federal renewable electricity production tax credit (PTC) is an inflation-adjusted per-kilowatt-hour (kWh) tax credit for electricity generated by qualified energy resources and sold by the taxpayer to an unrelated person during the taxable year. Originally enacted in 1992, the PTC has been renewed and expanded numerous times, most recently by the American Recovery and Reinvestment Act of 2009 (H.R. 1 Div. B, Section 1101 & 1102) in February 2009 (often referred to as "ARRA"), the American Taxpayer Relief Act of 2012 (H.R. 8, Sec. 407) in January 2013, and the Tax Increase Prevention Act of 2014 (H.R. 5771, Sec. 155) in December 2014.

c. The tax credit amount is $0.015 per kWh in 1993 dollars for some technologies and half of that amount for others. The amount is adjusted for inflation by multiplying the tax credit amount by the inflation adjustment factor for the calendar year in which the sale occurs, rounded to the nearest 0.1 cents. The Internal Revenue Service (IRS) publishes the inflation adjustment factor no later than April 1 each year in the Federal Registrar. (For 2014, the inflation adjustment factor used by the IRS is 1.5088.) The table below outlines the credit amount as it applies to different resource types. The table includes changes made by H.R. 8 in January 2013, and the inflation-adjusted credit amounts are current for the 2014 calendar year, as published in the IRS Notice 2014-36.

Resource Type Credit Amount

Wind $0.023/kWh

Closed-Loop Biomass

$0.023/kWh

Open-Loop Biomass

$0.011/kWh

Geothermal Energy $0.023/kWh

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Landfill Gas $0.011/kWh

Municipal Solid Waste

$0.011/kWh

Qualified Hydroelectric

$0.011/kWh

Marine and Hydrokinetic

$0.011/kWh

d. The duration of the credit is generally 10 years after the date the facility is

placed in service, but there are two exceptions: i. open-loop biomass, geothermal, small irrigation hydro, landfill gas,

and municipal solid waste combustion facilities placed into service after October 22, 2004, and before enactment of the Energy Policy Act of 2005, on August 8, 2005, are only eligible for the credit for a 5-year period, and

ii. open-loop biomass facilities placed in service before October 22, 2004, are eligible for the 5-year period beginning January 1, 2005.

e. The credit is claimed by completing Form 8835, "Renewable Electricity Production Credit," and Form 3800, "General Business Credit." For more information, contact IRS Telephone Assistance for Businesses at 1-800-829-4933.

f. The Tax Increase Prevention Act of 2014 (H.R. 5771, Sec. 155) extended both the PTC and permission for PTC-eligible facilities to claim the Investment Tax Credit in lieu of the PTC through the end of 2014. (Prior to the legislation, the PTC had expired December 31, 2013.) Although not enacted until December 2014, the effective date is January 1, 2014, meaning any qualifying project that commenced construction at any point in 2014 is eligible to claim the PTC. The American Taxpayer Relief Act of 2012 revised the PTC by removing "placed in service" deadlines and replacing them with deadlines that use the commencing of construction as a basis for determining facility eligibility. It also contained language revising the definition of the term "municipal solid waste" to exclude "paper that is commonly recycled and which has been segregated from other solid waste.” The definition change for municipal solid waste applies to electricity produced and sold after the enactment date of the legislation (January 2, 2013) in taxable years ending after that date.

g. To claim the PTC, construction on an eligible project must have “commenced construction” prior to January 1, 2015. The IRS has issued guidance on how it

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will evaluate whether construction has commenced in IRS Notices 2013-29, 2013-60, 2014-46, and 2015-25 (please see the full text of these notices for complete information on determining the commencing of construction). The guidelines establish two methods—a “physical work” test and a 5% safe harbor (see sections below for details)—to determine when construction has begun on a qualified facility. Meeting the criteria of either method is sufficient to demonstrate that construction has commenced. Both methods require that a taxpayer make continuous progress towards completion once construction has begun by meeting the Continuous Construction Test (to satisfy the Physical Work Test) or the Continuous Efforts Test (to satisfy Safe Harbor). For projects beginning construction before the end of 2014 and placed in service before January 1, 2017, the facility will be considered to satisfy the Continuous Construction Test or the Continuous Efforts Test, regardless of the amount of physical work performed or the amount of costs paid or incurred (Notice 2015-25).

h. The physical work test provides that a taxpayer may establish the beginning of construction by beginning "physical work of a significant nature.” The physical work test is based on the nature of the work performed rather than the cost of the work; if the work performed is of a significant nature, then “there is no fixed minimum amount of work or monetary or percentage threshold required to satisfy the Physical Work Test” (Notice 2014-46). Notice 2013-29 provides several examples of actions that constitute work of a significant nature, including:

i. for a facility that produces electricity from a wind turbine, the beginning of the excavation for the foundation, the setting of anchor bolts into the ground, or the pouring of the concrete pads of the foundation;

ii. physical work on a custom-designed transformer that steps up the voltage of electricity produced at the facility to the voltage needed for transmission; and

iii. beginning construction of roads integral to the activity performed by the facility including onsite roads used for moving materials to be processed (e.g., biomass) and roads for equipment to operate and maintain the facility.

i. Safe Harbor with respect to a facility is demonstrated by showing that 5% or more of the total cost of the facility was paid or incurred before January 1, 2015. If less than 5% of the total cost of the facility was paid or incurred prior to January 1, 2015, Safe Harbor is not fully satisfied; however, if a taxpayer paid or incurred at least 3%, the Safe Harbor may be satisfied and the PTC (or ITC) may be claimed with respect to some, but not all, of the individual

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facilities comprising the project. Specifically, “a taxpayer may claim the PTC or ITC on any number of individual facilities as long as the total aggregate cost of those individual facilities at the time the project is placed in service is not greater than 20 times the amount the taxpayer paid or incurred before” January 1, 2015 (Notice 2014-46)

6. JEA- Commercial Energy Efficiency Rebate Program a. JEA offers a number of rebates to commercial customers for purchasing and

installing energy efficient equipment in eligible facilities. Rebates are available for lighting, HVAC measures, weatherization, variable frequency drives, cool roofing, windows, refrigeration, water heating and custom measures. Some incentives are awarded on a flat rebate amount while others are calculated based upon capacity, efficiency, or energy savings. All equipment must meet or exceed the stated program efficiency requirements. Measures not covered by a prescribed incentive may be eligible for the custom incentive amount. These incentives are awarded on a $0.08/kWh schedule.

7. U.S. Department of Energy- Loan Guarantee Programs a. Section 1703 of Title XVII of the Energy Policy Act (EPAct) of 2005 created

the Department of Energy's (DOE's) Loan Guarantee Program. The program was reauthorized and revised by the American Recovery and Reinvestment Act (ARRA) of 2009 by adding Section 1705 to EPAct. The 1705 Program was retired in September 2011, and Loan Guarantees are no longer available under that authority. DOE, however, still has authority to issue Loan Guarantees under the old Section 1703 Program. Under Section 1703, DOE is authorized to issue loan guarantees for projects with high technology risks 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." Loan guarantees are intended to encourage early commercial use of new or significantly improved technologies in energy projects. The loan guarantee program generally does not support research and development projects. Loan guarantees are provided in response to open solicitations. A solicitation for Renewable Energy Projects and Energy Efficiency Projects was issued in July 2014, with a final Part I application due date of December 2, 2015. Up to $2.5 billion is available for projects in renewable energy, efficient end-use, and efficient generation, transmission, and distribution technologies. See the program website for more details on eligibility and the application process. Section 1703 requires either an appropriation to cover the Credit Subsidy Cost (the expected long term liability to the Federal Government for providing the loan guarantee), or payment of the Credit Subsidy Cost by the borrower. A credit-based interest

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rate spread will be added to certain loans receiving a 100% loan guarantee from DOE and financing from the Federal Financing Bank.

8. USDA- Rural Energy for America Program (Energy Audit and Renewable Energy Development Assistance

a. Note: The U.S. Department of Agriculture's Rural Development periodically issues Notices of Solicitation of Applications for the Rural Energy for America Program (REAP) in the Federal Registry. The most recent solicitation for the REAP program was on December 29th, 2014 and can be viewed in the Federal Registry here.

b. The Renewable Energy for America Program (REAP) Energy Audit and Renewable Energy Development Assistance Program (EA/REDA) provides assistance to agricultural producers and rural small businesses for energy audits and renewable energy technical assistance including renewable energy site assessments. Applicants must submit separate applications for assistance, limited to one energy audit and one REDA per fiscal year. The maximum aggregate amount of an energy audit and REDA grant in a Federal fiscal year* is $100,000. In 2015, $2 Million in EA/REDA grant funding is available. Eligible project costs for eligible applicants includes salaries directly related to the project, travel expenses directly related to conducting energy audits or renewable energy development assistance, office supplies (e.g., paper, pens, file folders), administrative expenses, up to a maximum of 5 percent of the grant, which include but are not limited to utilities, office space, operation expenses of office and other project related equipment. Land grant colleges and universities are referred to above as schools, public universities, and institutions; K-12 schools are not eligible for this grant.

c. The 2014 Agricultural Act (2014 Farm Bill) authorized the Rural Energy for America Program with $50 Million in mandatory funding each fiscal year. USDA overhauled the Rural Energy for America Program although the core program remains largely the same. One major change includes a 3 tiered application structure including 1) total project costs of $80,000 or less, 2) total project costs more than $80,000 but less than $200,000, and, 3) total project costs of $200,000 or greater. Grant applications of $20,000 or less will compete in 5 competitions (Congress required 20% of funding to be used for small grants of $20,000 or less). The Food, Conservation, and Energy Act of 2008 (H.R. 2419), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program,* into the Rural Energy for America Program (REAP). Similar to its predecessor, REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable

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energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the program in the following amounts: $55 million for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, up to $25 million in discretionary funding may be issued each year. The American Taxpayer Relief Act of 2012 (H.R. 8) extended discretionary funding for FY 2013.

9. USDA- Rural Energy for America Program (Grants) a. Note: The U.S. Department of Agriculture's Rural Development issues

periodic Notices of Solicitation of Applications for the Rural Energy for America Program (REAP) in the Federal Registry. The most recent solicitation for the REAP program was on May 5th, 2014 and can be viewed in the Federal Registry here. The next Notice of Funding Availability will be published in the Federal Registry and on the USDA website here. Notably, the 2014 Farm Bill removed authority for the USDA to fund REAP feasibility studies with REAP grants.

b. The Rural Energy for America Program (REAP) provides financial assistance to agricultural producers and rural small businesses in rural America to purchase, install, and construct renewable energy systems, make energy efficiency improvements to non-residential buildings and facilities, use renewable technologies that reduce energy consumption, and participate in energy audits and renewable energy development assistance. Renewable energy projects for the Renewable Energy Systems and Energy Efficiency Improvement Guaranteed Loan and Grant Program include wind, solar, biomass and geothermal, and hydrogen derived from biomass or water using wind, solar, or geothermal energy sources. These grants are limited to 25% of a proposed project's cost, and a loan guarantee may not exceed $25 million. The combined amount of a grant and loan guarantee must be at least $5,000 (with the grant portion at least $1,500) and may not exceed 75% of the project’s cost. In general, a minimum of 20% of the funds available for these incentives will be dedicated to grants of $20,000 or less. For more information on grant, loan guarantees, loan financing, and opportunities for combinations thereof, visit the USDA website. In 2014, $12.3 million in grants and $56.4 million in loans was awarded. For a complete list of 2014 projects.

c. Grants and loans are generally available to state government entities, local governments, tribal governments, land-grant colleges and universities**, rural electric cooperatives and public power entities, and other entities, as determined by the USDA. To be eligible for REAP grants and loans, an applicant must have a satisfactory revenue stream and be in control the

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budget, operations, and maintenance of a project for the entire duration of the loan or grant. Rural small businesses must be located in rural areas, but agricultural producers may be located in non-rural areas. Eligible project costs include purchasing energy efficiency improvements or a renewable energy system, energy audits or assessments, permitting and licensing fees, and business plans and retrofitting. For new construction the replacement of older equipment with more efficient equipment may be eligible as a project cost only when a new facility is planned to be more efficient and similarly sized than the older facility. Working capital and land acquisition are only eligible for loan guarantees. Regional rural energy coordinators provide loan and grant applications upon request.

d. The Food, Conservation, and Energy Act of 2008 (H.R. 2419), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program,* into the Rural Energy for America Program (REAP). Similar to its predecessor, the REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the new program in the following amounts: $55 million for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, up to $25 million in discretionary funding may be issued each year. The American Taxpayer Relief Act of 2012 (H.R. 8) extended discretionary funding for FY 2013. The 2014 Farm Bill reauthorized the USDA to offer these programs and removed the mandate to offer grants for feasibility studies.

e. * The Renewable Energy Systems and Energy Efficiency Improvements Program was created by the USDA pursuant to Section 9006 of the 2002 federal Farm Security and Rural Investment Act of 2002. Funding in the amount of $23 million per year was appropriated for each fiscal year from FY 2003-2007. In March 2008, the USDA announced that it would accept $220.9 million in applications for grants, loan guarantees, and loan/grant combination packages under the Renewable Energy Systems and Energy Efficiency Improvements Program. The application deadline was June 16, 2008.

f. **Land grant colleges and universities are referred to above as "schools" and "institutions". It is important to note that K-12 schools are not eligible for this grant.

10. USDA- Rural Energy for America Program (Loan Guarantees)

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a. Note: The U.S. Department of Agriculture's Rural Development issues periodic Notices of Solicitation of Applications for the Rural Energy for America Program (REAP) in the Federal Registry. The most recent solicitation for the REAP program was on May 5th, 2014 and can be viewed in the Federal Registry here. The next Notice of Funding Availability will be published in the Federal Registry and on the USDA website here. Notably, the 2014 Farm Bill removed authority for the USDA to fund REAP feasibility studies with REAP grants.

b. The Rural Energy for America Program (REAP) provides financial assistance to agricultural producers and rural small businesses in rural America to purchase, install, and construct renewable energy systems, make energy efficiency improvements to non-residential buildings and facilities, use renewable technologies that reduce energy consumption, and participate in energy audits and renewable energy development assistance. Renewable energy projects for the Renewable Energy Systems and Energy Efficiency Improvement Guaranteed Loan and Grant Program include wind, solar, biomass and geothermal, and hydrogen derived from biomass or water using wind, solar, or geothermal energy sources. These grants are limited to 25% of a proposed project's cost, and a loan guarantee may not exceed $25 million. The combined amount of a grant and loan guarantee must be at least $5,000 (with the grant portion at least $1,500) and may not exceed 75% of the project’s cost. In general, a minimum of 20% of the funds available for these incentives will be dedicated to grants of $20,000 or less. For more information on grant, loan guarantees, loan financing, and opportunities for combinations thereof, visit the USDA website. In 2014, $12.3 million in grants and $56.4 million in loans was awarded. For a complete list of 2014 projects, click here.

c. Grants and loans are generally available to state government entities, local governments, tribal governments, land-grant colleges and universities**, rural electric cooperatives and public power entities, and other entities, as determined by the USDA. To be eligible for REAP grants and loans, an applicant must have a satisfactory revenue stream and be in control the budget, operations, and maintenance of a project for the entire duration of the loan or grant. Rural small businesses must be located in rural areas, but agricultural producers may be located in non-rural areas. Eligible project costs include purchasing energy efficiency improvements or a renewable energy system, energy audits or assessments, permitting and licensing fees, and business plans and retrofitting. For new construction the replacement of older equipment with more efficient equipment may be eligible as a project cost only when a new facility is planned to be more efficient and similarly sized than the older facility. Working capital and land acquisition are only eligible

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for loan guarantees. Regional rural energy coordinators provide loan and grant applications upon request.

d. The Food, Conservation, and Energy Act of 2008 (H.R. 2419), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program,* into the Rural Energy for America Program (REAP). Similar to its predecessor, the REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the new program in the following amounts: $55 million for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, up to $25 million in discretionary funding may be issued each year. The American Taxpayer Relief Act of 2012 (H.R. 8) extended discretionary funding for FY 2013. The 2014 Farm Bill reauthorized the USDA to offer these programs and removed the mandate to offer grants for feasibility studies.

e. * The Renewable Energy Systems and Energy Efficiency Improvements Program was created by the USDA pursuant to Section 9006 of the 2002 federal Farm Security and Rural Investment Act of 2002. Funding in the amount of $23 million per year was appropriated for each fiscal year from FY 2003-2007. In March 2008, the USDA announced that it would accept $220.9 million in applications for grants, loan guarantees, and loan/grant combination packages under the Renewable Energy Systems and Energy Efficiency Improvements Program. The application deadline was June 16, 2008.

f. **Land grant colleges and universities are referred to above as "schools" and "institutions". It is important to note that K-12 schools are not eligible for this grant.

11. USDA- Repowering Assistance Biorefinery Program a. The Repowering Assistance Program provides payments to eligible

biorefineries to replace fossil fuels used to produce heat or power to operate the biorefineries with renewable biomass. Reimbursement payments are provided to offset a portion of the costs associated with the conversion of existing fossil fuel systems to renewable biomass fuel systems. The reimbursement amounts vary and are determined by the availability of funds, the project scope, and the ability of the proposed project to meet all the scoring criteria. In particular reimbursement amounts are calculated by the percentage reduction in fossil fuel used by the biorefinery, the quantity of

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fossil fuels replaced by a renewable biomass system, and the cost effectiveness of the renewable biomass system. The program will provide reimbursement payments for eligible project costs of the renewable biomass system during the construction phase of the repowering project. Up to 90% of the funds can be utilized during project construction, with the remaining 10% made upon demonstration of successful completion of the project. A maximum of 50% of the total project costs can be reimbursed, as long as amount does not exceed the maximum award for the fiscal year.

b. Eligible technologies may include, but are not limited to, anaerobic digesters, processed steam, biomass boilers, or combined heat and power technologies (CHP). Applicants must demonstrate, at the time of application, that the proposed site has direct access to biomass or third party commitments to supply biomass for the repowering project for at least three years. Payments are made for eligible post-application costs incurred during the construction phase of the repowering project. Congress allocated $35 million for FY 2009, in addition to up to $15 million in discretionary funds annually beginning in FY 2009. The American Taxpayer Relief Act of 2012 extended discretionary funding through FY 2013.

12. Modified Accelerated Cost- Recovery System a. Note: Sec. 125 of H.R. 5771, the Tax Increase Prevention Act of 2014,

extended the "placed in service" date of the 50% bonus depreciation provision originally included in the American Recovery and Reinvestment Act of 2009 to December 31, 2014, and thus retroactively through the 2014 tax year.

b. Under the federal Modified Accelerated Cost-Recovery System (MACRS), businesses may recover investments in certain property through depreciation deductions. The MACRS establishes a set of class lives for various types of property, ranging from three to 50 years, over which the property may be depreciated. A number of renewable energy technologies are classified as five-year property (26 USC § 168(e)(3)(B)(vi)) under the MACRS, which refers to 26 USC § 48(a)(3)(A), often known as the energy investment tax credit or ITC to define eligible property. Such property currently includes*:

i. a variety of solar-electric and solar-thermal technologies ii. fuel cells and microturbines

iii. geothermal electric iv. direct-use geothermal and geothermal heat pumps v. small wind (100 kW or less)

vi. combined heat and power (CHP) vii. the provision which defines ITC technologies as eligible also adds the

general term "wind" as an eligible technology, extending the five-year schedule to large wind facilities as well.

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c. In addition, for certain other types of renewable energy property, such as biomass or marine and hydrokinetic property, the MACRS property class life is seven years. Eligible biomass property generally includes assets used in the conversion of biomass to heat or to a solid, liquid or gaseous fuel, and to equipment and structures used to receive, handle, collect and process biomass in a waterwall, combustion system, or refuse-derived fuel system to create hot water, gas, steam and electricity. Marine and hydrokinetic property includes facilities that utilize waves, tides, currents, free-flowing water, or differentials in ocean temperature to generate energy. It does not include traditional hydropower that uses dams, diversionary structures, or impoundments. The 5-year schedule for most types of solar, geothermal, and wind property has been in place since 1986. The federal Energy Policy Act of 2005 (EPAct 2005) classified fuel cells, microturbines and solar hybrid lighting technologies as five-year property as well by adding them to § 48(a)(3)(A). This section was further expanded in October 2008 by the addition of geothermal heat pumps, combined heat and power, and small wind under The Energy Improvement and Extension Act of 2008.

d. The federal Economic Stimulus Act of 2008, enacted in February 2008, included a 50% first-year bonus depreciation (26 USC § 168(k)) provision for eligible renewable-energy systems acquired and placed in service in 2008. The allowance for bonus depreciation has since been extended and modified several times since the original enactment, most recently in December 2014 by the Tax Increase Prevention Act Of 2014 (H.R. 5771, Sec. 125). This legislation extended the "in-service" provision for qualifying property through to December 31, 2014, and thus also did so retroactively for property placed in service after December 31, 2013, through to enactment.

e. The 50% first-year bonus depreciation provision enacted in 2008 was extended (retroactively for the entire 2009 tax year) under the same terms by the American Recovery and Reinvestment Act of 2009 (H.R. 1), enacted in February 2009. It was renewed again in September 2010 (retroactively for the entire 2010 tax year) by the Small Business Jobs Act of 2010 (H.R. 5297). In December 2010 the provision for bonus depreciation was amended and extended yet again by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (H.R. 4853). Under these amendments, eligible property placed in service after September 8, 2010 and before January 1, 2012 was permitted to qualify for 100% first-year bonus depreciation. The December 2010 amendments also permitted bonus depreciation to be claimed for property placed in service during 2012, but reverted the allowable amount from 100% to 50% of the eligible basis. The 50% first-year bonus depreciation allowance was further extended for

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property placed in service during 2013 by the American Taxpayer Relief Act of 2012 (H.R. 8, Sec. 331) in January 2013. As noted above, the Tax Increase Prevention Act Of 2014 (H.R. 5771, Sec. 125), extended these provisions through to December 31, 2014, and thus retroactively for the 2014 tax year.

f. *Note that the definitions of eligible technologies included in this entry are somewhat simplified versions of those contained in tax code, which often contain additional caveats, restrictions, and modifications. Those interested in this incentive should review the relevant sections of the code in detail prior to making business decisions.

13. Energy- Efficient Commercial Building Tax Deduction a. Note: This tax deduction expired at the end of 2013. The Tax Increase

Prevention Act of 2014 retroactively reinstated the tax credit for projects completed in 2014.

b. The federal Energy Policy Act of 2005 established a tax deduction for energy-efficient commercial buildings applicable to qualifying systems and buildings placed in service from January 1, 2006, through December 31, 2007. This deduction was subsequently extended through 2008, and then again through 2013 by Section 303 of the federal Energy Improvement and Extension Act of 2008 (H.R. 1424, Division B), enacted in October 2008. A tax deduction of $1.80 per square foot is available to owners of new or existing buildings who install (1) interior lighting; (2) building envelope, or (3) heating, cooling, ventilation, or hot water systems that reduce the building’s total energy and power cost by 50% or more in comparison to a building meeting minimum requirements set by ASHRAE Standard 90.1-2001. Energy savings must be calculated using qualified computer software approved by the IRS. Click here for the list of approved software. Deductions of $0.60 per square foot are available to owners of buildings in which individual lighting, building envelope, or heating and cooling systems meet target levels that would reasonably contribute to an overall building savings of 50% if additional systems were installed. The deductions are available primarily to building owners, although tenants may be eligible if they make construction expenditures. In the case of energy efficient systems installed on or in government property, tax deductions will be awarded to the person primarily responsible for the system's design. Deductions are taken in the year when construction is completed. The IRS released interim guidance (IRS Notice 2006-52) in June 2006 to establish a process to allow taxpayers to obtain a certification that the property satisfies the energy efficiency requirements contained in the statute. IRS Notice 2008-40 was issued in March of 2008 to further clarify the rules. NREL published a report (NREL/TP-550-40228) in

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February 2007 which provides guidelines for the modeling and inspection of energy savings required by the statute.

14. USDA- High Energy Cost Grant Program a. NOTE: The most recent solicitation for this program closed August 1, 2014.

Please check the program website for information on future solicitations. b. The U.S. Department of Agriculture (USDA) offers an ongoing grant program

for the improvement of energy generation, transmission, and distribution facilities in rural communities. This program began in 2000. Eligibility is limited to projects in communities that have average home energy costs at least 275% above the national average. Individuals, non-profits, commercial entities, state and local governments (including any agency or instrumentality thereof), and tribal governments are eligible for this grant. Individuals must work on a project that will benefit the community in order to qualify. Under the most recent solicitation for projects, a total of $7 million was available for qualifying projects. Under this solicitation grants ranging from $50,000 to $3 million were available for a variety of activities, including:

i. Electric generation, transmission, and distribution facilities; ii. Natural gas or petroleum storage or distribution facilities;

iii. Renewable energy facilities used for on-grid or off-grid electric power generation, water or space heating, or process heating and power;

iv. Backup up or emergency power generation or energy storage equipment; and

v. Weatherization of residential and community property, or other energy efficiency or conservation programs.

c. This grant program is not limited to renewable energy or energy conservation and efficiency measures, but these measures are eligible for this grant program.

15. Florida Power and Light- Solar Rebate Program a. Note: This program will not be offered after 2015. More information is

available on FPL's solar rebate web site. b. Florida Power and Light (FPL) offers incentives to encourage residential

and business customers to install solar water heating. The program is open to all business and residential customers, however incentives are not guaranteed. Schools, non-profit organizations, and low-income housing providers are also eligible to participate in separate tailored offerings which are detailed on the program web site. Residential rebates are provided on a flat rate of $1,000 per system for solar water heating. Business customers who utilize eligible solar water heating systems are eligible for a rebate of $30 per 1,000 BTUh per day. Businesses incentives are capped at $50,000 per site and $150,000 for multiple locations All collectors must be approved and certified by the Florida

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Solar Energy Center (FSEC) and have an FSEC system certification number. There is no minimum or maximum size limit, other than the dollar limit on the rebate. Customers can go to the program web site listed above to reserve funds. There is no paper application and all communications for the program will be conducted via email. See the details of these targeted programs on the FAQ section of the program web site. To find out more about these incentives, as well as renewable energy programs such as net metering, please visit the program web site.

16. Florida Power and Light- Business Energy Efficiency Rebates a. Florida Power and Light (FPL) offer incentives for its business customers to

upgrade the HVAC system, building envelope, water heating, refrigeration and lighting systems. The individual rebates vary according to system size and efficiency rating. All equipment must meet program requirements for purchase, installation and energy efficiency. Additionally, custom projects, which trim at least 25 KW off of facility peak-demand, may be eligible for incentives from FPL. To find out more about these incentives, as well as renewable energy programs such as net metering, please visit the program web site.

17. Progress Energy Florida- Commercial Energy Efficiency Rebate Program a. Progress Energy Florida offers an incentive to its business customers for

replacing their old equipment with high-efficiency models. Rebates are available for cool and green roofs, roof insulation, rooftop decommissioning, ceiling insulation, HVAC systems, efficient lighting, lighting sensors, window film, thermal energy storage, compressed air systems, high efficiency ERV, and heat pumps. Building envelope improvements like ceiling insulation, window film, and a variety of products and approaches meant to reduce the amount of heat transferred from a building can be applied to both retrofits and new construction projects. Upon request, Progress Energy Florida will provide a free Business Energy Check to determine if the facility is eligible for the incentive. Eligible facilities will earn a per-square-foot incentive based on the type of material used. Additional restrictions apply. Interested customers should refer to the program website and related brochures for more details including incentive levels and equipment requirements.

Kentucky (back to top) 1. Tax Exemption for Large-Scale Renewable Energy Projects

a. In August 2007 Kentucky established the Incentives for Energy Independence Act (IEIA) to promote the development of renewable energy and alternative fuel facilities, energy efficient buildings, alternative fuel vehicles, research & development activities, and other energy initiatives. For renewable energy

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facilities, IEIA provides incentives to companies that build or renovate facilities that utilize renewable energy. A renewable energy facility is defined as one that generates at least 50 kW of electricity from solar power or at least 1 MW from wind power, biomass, landfill gas, hydropower or similar renewable resources. The electricity must be sold to an unrelated party. The minimum investment in any renewable energy facility must be $1 million in capital expenditure which is defined to include various non-capital costs such as labor. Companies may receive a sales tax incentive of up to 100% of the Kentucky sales and use tax paid (on or after the activation date) on materials, machinery and equipment used to construct, retrofit or upgrade an eligible project. Approved companies may also require that employees whose jobs were created as a result of the associated project, as a condition of employment, to pay a wage assessment of up to 4% of their gross wages. Employees will be allowed a Kentucky income tax credit equal to the assessment withheld from their wages. The maximum recovery for a single project from all incentives, including the income and liability entity tax credit, sales tax refund and the wage assessment, may not exceed 50% of the capital investment. Prior to making any capital investments in a project, each eligible company must submit an application ($1000 fee) for incentives to the Kentucky Economic Development Finance Authority. Each incentive contract is negotiated on a case-by-case basis to determine the conditions and termination date of the project, not to exceed 25 years from the project's activation date.

2. Tax Credits for Renewable Energy Facilities a. In August 2007 Kentucky established the Incentives for Energy Independence

Act to promote the development of renewable energy and alternative fuel facilities, energy efficient buildings, alternative fuel vehicles, research & development activities and other energy initiatives. For renewable energy facilities, the bill provides incentives to companies that build or renovate facilities that utilize renewable energy, which may include:

i. up to 100% of the Kentucky income tax or the limited liability entity tax

ii. sales and use tax incentives of up to 100% iii. a wage assessment of up to 4% for associated employees iv. advanced disbursement of post-construction incentives

b. A renewable energy facility is defined as one that generates at least 50 kilowatts (kW) of electricity from solar power or at least 1 megawatt (MW) from wind power, biomass resources, landfill gas, hydropower or similar renewable resources. The electricity must be sold to an unrelated party. The minimum investment in any renewable energy facility must be $1 million in

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capital expenditure, which is defined to include various non-capital costs such as labor. The tax credit allows approved facilities to receive a credit up to 100% of Kentucky income tax and the limited liability tax for projects that construct, retrofit or upgrade facilities that generate power from renewable resources. In addition, companies may also receive a sales tax incentive of up to 100% of the Kentucky sales and use tax paid (on or after the activation date) on materials, machinery and equipment used to construct, retrofit or upgrade an eligible project. Approved companies may also require that employees whose jobs were created as a result of the associated project, as a condition of employment, agree to pay a wage assessment of up to 4% of their gross wages. Employees will be allowed a Kentucky income tax credit equal to the assessment withheld from their wages. The maximum recovery for a single project from all incentives, including the income and liability entity tax credit, sales tax refund and the wage assessment, may not exceed 50% of the capital investment. Prior to making any capital investments in a project, each eligible company must submit an application for incentives to the Kentucky Economic Development Finance Authority. There is a $1,000 application fee. Each incentive contract is negotiated on a case-by-case basis to determine the conditions and termination date of the project, not to exceed 25 years from the project's activation date. There is also a 0.25% administrative fee assessed after the final incentives package is settled (capped at $50,000).

3. USDA- Biorefinery Assistance Program a. USDA Rural Development is offering loan guarantees for the development,

construction, and retrofitting of commercial-scale biorefineries. Eligible borrowers include individuals, entities, Indian tribes, state or local governments, corporations, farm cooperatives or farm cooperative organizations, associations of agricultural producers, National Laboratories, institutions of higher education, rural electric cooperatives, public power entities, and consortium of any of these types of entities. Financed entities must provide at least 20% of the financing for eligible project costs, and applications for funding must include an independent feasibility study and technical assessment. Eligible project costs include the purchase and installation of equipment, construction or retrofitting costs, permit and licensing fees, working capital, land acquisition, and the costs of financing. The project must meet the following requirements:

i. Must be for the development and construction or the retrofitting of a commercial-scale biorefinery using an eligible technology

ii. Must use an eligible feedstock for the production of advanced biofuels and biobased products

iii. The majority of the production must be an advanced biofuels

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b. Eligible advanced biofuels include: i. Biofuel derived from cellulose, hemicellulose, or lignin, or other fuels

derived from cellulose ii. Biofuel derived from sugar, starch, excluding ethanol derived from

from corn kernel starch iii. Biofuel derived from waste material, including crop residue,

vegetative waste material, animal waste, food waste, and yard waste iv. Diesel fuel derived from renewable biomass, including vegetable oil

and animal fat v. Biogas, including landfill gas and sewage waste treatment gas,

produced through the conversion of organic matter from renewable biomass

c. In 2014, "renewable chemicals" and "biofuels" were added to this program under the name of Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program to provide guaranteed loans for the development and construction of commercial-scale biorefineries or for the retrofitting of existing facilities using eligible technology for the development of advanced biofuels.

d. Congress allocated $75 million for FY 2009 and $245 million for FY 2010, in addition to up to $150 million in discretionary funds annually beginning in FY 2009. The American Taxpayer Relief Act of 2012 extended discretionary funding through FY 2013. For FY 2014, approximately $76 million in carry over budget will support a program level of approximately $181 million.

e. Forms must be submitted by January 30th of each program year to compete for funds.

4. Business Energy Investment Tax Credit a. Note: IRS Notice 2015-4 included new certification requirements for small

wind turbines placed in service after January 26, 2015. Small wind turbines must now meet the performance and quality standards set forth by either the American Wind Energy Association Small Wind Turbine Performance and Safety Standard 9.1-2009 (AWEA), or the International Electrotechnical Commission 61400-1, 61400-12, and 61400-11 (IEC)

b. The federal business energy investment tax credit available under 26 USC § 48 was expanded significantly by the Energy Improvement and Extension Act of 2008 (H.R. 1424), enacted in October 2008. This law extended the duration -- by eight years -- of the existing credits for solar energy, fuel cells and microturbines; increased the credit amount for fuel cells; established new credits for small wind-energy systems, geothermal heat pumps, and combined heat and power (CHP) systems; allowed utilities to use the credits; and allowed taxpayers to take the credit against the alternative minimum tax

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(AMT), subject to certain limitations. The credit was further expanded by the American Recovery and Reinvestment Act of 2009, enacted in February 2009.

c. In general, the following credits are available for eligible systems placed in service on or before December 31, 2016*:

d. Solar. The credit is equal to 30% of expenditures, with no maximum credit. Eligible solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. Hybrid solar lighting systems, which use solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight, are eligible. Passive solar systems and solar pool-heating systems are not eligible.

i. Fuel Cells. The credit is equal to 30% of expenditures, with no maximum credit. However, the credit for fuel cells is capped at $1,500 per 0.5 kilowatt (kW) of capacity. Eligible property includes fuel cells with a minimum capacity of 0.5 kW that have an electricity-only generation efficiency of 30% or higher. (Note that the credit for property placed in service before October 4, 2008, is capped at $500 per 0.5 kW.)

ii. Small Wind Turbines. The credit is equal to 30% of expenditures, with no maximum credit for small wind turbines placed in service after December 31, 2008. Eligible small wind property includes wind turbines up to 100 kW in capacity. (In general, the maximum credit is $4,000 for eligible property placed in service after October 3, 2008, and before January 1, 2009. The American Recovery and Reinvestment Act of 2009 removed the $4,000 maximum credit limit for small wind turbines.) Small wind turbines must meet the performance and quality standards set forth by either the American Wind Energy Association Small Wind Turbine Performance and Safety Standard 9.1-2009 (AWEA), or the International Electrotechnical Commission 61400-1, 61400-12, and 61400-11 (IEC)

iii. Geothermal Systems. The credit is equal to 10% of expenditures, with no maximum credit limit stated. Eligible geothermal energy property includes geothermal heat pumps and equipment used to produce, distribute or use energy derived from a geothermal deposit. For electricity produced by geothermal power, equipment qualifies only up to, but not including, the electric transmission stage. For geothermal heat pumps, this credit applies to eligible property placed in service after October 3, 2008. Note that the credit for geothermal property, with the exception of geothermal heat pumps, has no stated expiration date.

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iv. Microturbines. The credit is equal to 10% of expenditures, with no maximum credit limit stated (explicitly). The credit for microturbines is capped at $200 per kW of capacity. Eligible property includes microturbines up to two megawatts (MW) in capacity that have an electricity-only generation efficiency of 26% or higher.

v. Combined Heat and Power (CHP). The credit is equal to 10% of expenditures, with no maximum limit stated. Eligible CHP property generally includes systems up to 50 MW in capacity that exceed 60% energy efficiency, subject to certain limitations and reductions for large systems. The efficiency requirement does not apply to CHP systems that use biomass for at least 90% of the system's energy source, but the credit may be reduced for less-efficient systems. This credit applies to eligible property placed in service after October 3, 2008.

e. In general, the original use of the equipment must begin with the taxpayer, or the system must be constructed by the taxpayer. The equipment must also meet any performance and quality standards in effect at the time the equipment is acquired. The energy property must be operational in the year in which the credit is first taken. Significantly, the American Recovery and Reinvestment Act of 2009 repealed a previous restriction on the use of the credit for eligible projects also supported by "subsidized energy financing." For projects placed in service after December 31, 2008, this limitation no longer applies. Businesses that receive other incentives are advised to consult with a tax professional regarding how to calculate this federal tax credit.

f. * A number of changes to this credit are scheduled to take effect for systems placed in service after December 31, 2016. The credit for equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat will decrease from 30% to 10%. The credit for geothermal heat pumps, hybrid solar lighting, small wind, fuel cells, microturbines, and combined heat and power systems will expire. The credit amount for equipment which uses geothermal energy to produce electricity will remain at 10%.

5. Renewable Electricity Production Tax Credit a. Note: In December 2014, The Tax Increase Prevention Act of 2014 extended

the expiration date for this tax credit to December 31, 2014. Projects that are not under construction prior to January 1, 2015, are ineligible for this credit. In March 2015, IRS Notice 2015-25 extended the Continuous Construction Test and Continuous Efforts Test (used to determine if a project commencing construction before the end of 2014 is eligible for the PTC) by 1 year to January 1, 2017.

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b. The federal renewable electricity production tax credit (PTC) is an inflation-adjusted per-kilowatt-hour (kWh) tax credit for electricity generated by qualified energy resources and sold by the taxpayer to an unrelated person during the taxable year. Originally enacted in 1992, the PTC has been renewed and expanded numerous times, most recently by the American Recovery and Reinvestment Act of 2009 (H.R. 1 Div. B, Section 1101 & 1102) in February 2009 (often referred to as "ARRA"), the American Taxpayer Relief Act of 2012 (H.R. 8, Sec. 407) in January 2013, and the Tax Increase Prevention Act of 2014 (H.R. 5771, Sec. 155) in December 2014.

c. The tax credit amount is $0.015 per kWh in 1993 dollars for some technologies and half of that amount for others. The amount is adjusted for inflation by multiplying the tax credit amount by the inflation adjustment factor for the calendar year in which the sale occurs, rounded to the nearest 0.1 cents. The Internal Revenue Service (IRS) publishes the inflation adjustment factor no later than April 1 each year in the Federal Registrar. (For 2014, the inflation adjustment factor used by the IRS is 1.5088.) The table below outlines the credit amount as it applies to different resource types. The table includes changes made by H.R. 8 in January 2013, and the inflation-adjusted credit amounts are current for the 2014 calendar year, as published in the IRS Notice 2014-36.

Resource Type Credit Amount

Wind $0.023/kWh Closed-Loop Biomass

$0.023/kWh

Open-Loop Biomass

$0.011/kWh

Geothermal Energy

$0.023/kWh

Landfill Gas $0.011/kWh Municipal Solid Waste

$0.011/kWh

Qualified Hydroelectric

$0.011/kWh

Marine and Hydrokinetic

$0.011/kWh

d. The duration of the credit is generally 10 years after the date the facility is placed in service, but there are two exceptions:

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i. open-loop biomass, geothermal, small irrigation hydro, landfill gas, and municipal solid waste combustion facilities placed into service after October 22, 2004, and before enactment of the Energy Policy Act of 2005, on August 8, 2005, are only eligible for the credit for a 5-year period, and

ii. open-loop biomass facilities placed in service before October 22, 2004, are eligible for the 5-year period beginning January 1, 2005.

e. The credit is claimed by completing Form 8835, "Renewable Electricity Production Credit," and Form 3800, "General Business Credit." For more information, contact IRS Telephone Assistance for Businesses at 1-800-829-4933.

f. The Tax Increase Prevention Act of 2014 (H.R. 5771, Sec. 155) extended both the PTC and permission for PTC-eligible facilities to claim the Investment Tax Credit in lieu of the PTC through the end of 2014. (Prior to the legislation, the PTC had expired December 31, 2013.) Although not enacted until December 2014, the effective date is January 1, 2014, meaning any qualifying project that commenced construction at any point in 2014 is eligible to claim the PTC. The American Taxpayer Relief Act of 2012 revised the PTC by removing "placed in service" deadlines and replacing them with deadlines that use the commencing of construction as a basis for determining facility eligibility. It also contained language revising the definition of the term "municipal solid waste" to exclude "paper that is commonly recycled and which has been segregated from other solid waste.” The definition change for municipal solid waste applies to electricity produced and sold after the enactment date of the legislation (January 2, 2013) in taxable years ending after that date.

g. To claim the PTC, construction on an eligible project must have “commenced construction” prior to January 1, 2015. The IRS has issued guidance on how it will evaluate whether construction has commenced in IRS Notices 2013-29, 2013-60, 2014-46, and 2015-25 (please see the full text of these notices for complete information on determining the commencing of construction). The guidelines establish two methods—a “physical work” test and a 5% safe harbor (see sections below for details)—to determine when construction has begun on a qualified facility. Meeting the criteria of either method is sufficient to demonstrate that construction has commenced. Both methods require that a taxpayer make continuous progress towards completion once construction has begun by meeting the Continuous Construction Test (to satisfy the Physical Work Test) or the Continuous Efforts Test (to satisfy Safe Harbor). For projects beginning construction before the end of 2014 and placed in service before January 1, 2017, the facility will be considered to satisfy the

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Continuous Construction Test or the Continuous Efforts Test, regardless of the amount of physical work performed or the amount of costs paid or incurred (Notice 2015-25).

h. The physical work test provides that a taxpayer may establish the beginning of construction by beginning "physical work of a significant nature.” The physical work test is based on the nature of the work performed rather than the cost of the work; if the work performed is of a significant nature, then “there is no fixed minimum amount of work or monetary or percentage threshold required to satisfy the Physical Work Test” (Notice 2014-46). Notice 2013-29 provides several examples of actions that constitute work of a significant nature, including:

i. for a facility that produces electricity from a wind turbine, the beginning of the excavation for the foundation, the setting of anchor bolts into the ground, or the pouring of the concrete pads of the foundation;

ii. physical work on a custom-designed transformer that steps up the voltage of electricity produced at the facility to the voltage needed for transmission; and

iii. beginning construction of roads integral to the activity performed by the facility including onsite roads used for moving materials to be processed (e.g., biomass) and roads for equipment to operate and maintain the facility.

i. Safe Harbor with respect to a facility is demonstrated by showing that 5% or more of the total cost of the facility was paid or incurred before January 1, 2015. If less than 5% of the total cost of the facility was paid or incurred prior to January 1, 2015, Safe Harbor is not fully satisfied; however, if a taxpayer paid or incurred at least 3%, the Safe Harbor may be satisfied and the PTC (or ITC) may be claimed with respect to some, but not all, of the individual facilities comprising the project. Specifically, “a taxpayer may claim the PTC or ITC on any number of individual facilities as long as the total aggregate cost of those individual facilities at the time the project is placed in service is not greater than 20 times the amount the taxpayer paid or incurred before” January 1, 2015 (Notice 2014-46).

6. USDA- Rural Energy for America Program (Energy Audit and Renewable Energy Development Assistance)

a. Note: The U.S. Department of Agriculture's Rural Development periodically issues Notices of Solicitation of Applications for the Rural Energy for America Program (REAP) in the Federal Registry. The most recent solicitation for the REAP program was on December 29th, 2014 and can be viewed in the Federal Registry here.

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b. The Renewable Energy for America Program (REAP) Energy Audit and Renewable Energy Development Assistance Program (EA/REDA) provides assistance to agricultural producers and rural small businesses for energy audits and renewable energy technical assistance including renewable energy site assessments. Applicants must submit separate applications for assistance, limited to one energy audit and one REDA per fiscal year. The maximum aggregate amount of an energy audit and REDA grant in a Federal fiscal year* is $100,000. In 2015, $2 Million in EA/REDA grant funding is available. Eligible project costs for eligible applicants includes salaries directly related to the project, travel expenses directly related to conducting energy audits or renewable energy development assistance, office supplies (e.g., paper, pens, file folders), administrative expenses, up to a maximum of 5 percent of the grant, which include but are not limited to utilities, office space, operation expenses of office and other project related equipment. Land grant colleges and universities are referred to above as schools, public universities, and institutions; K-12 schools are not eligible for this grant.

c. The 2014 Agricultural Act (2014 Farm Bill) authorized the Rural Energy for America Program with $50 Million in mandatory funding each fiscal year. USDA overhauled the Rural Energy for America Program although the core program remains largely the same. One major change includes a 3 tiered application structure including 1) total project costs of $80,000 or less, 2) total project costs more than $80,000 but less than $200,000, and, 3) total project costs of $200,000 or greater. Grant applications of $20,000 or less will compete in 5 competitions (Congress required 20% of funding to be used for small grants of $20,000 or less). The Food, Conservation, and Energy Act of 2008 (H.R. 2419), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program,* into the Rural Energy for America Program (REAP). Similar to its predecessor, REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the program in the following amounts: $55 million for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, up to $25 million in discretionary funding may be issued each year. The American Taxpayer Relief Act of 2012 (H.R. 8) extended discretionary funding for FY 2013.

7. USDA- Rural Energy for America Program (Grants)

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a. Note: The U.S. Department of Agriculture's Rural Development issues periodic Notices of Solicitation of Applications for the Rural Energy for America Program (REAP) in the Federal Registry. The most recent solicitation for the REAP program was on May 5th, 2014 and can be viewed in the Federal Registry here. The next Notice of Funding Availability will be published in the Federal Registry and on the USDA website here. Notably, the 2014 Farm Bill removed authority for the USDA to fund REAP feasibility studies with REAP grants.

b. The Rural Energy for America Program (REAP) provides financial assistance to agricultural producers and rural small businesses in rural America to purchase, install, and construct renewable energy systems, make energy efficiency improvements to non-residential buildings and facilities, use renewable technologies that reduce energy consumption, and participate in energy audits and renewable energy development assistance. Renewable energy projects for the Renewable Energy Systems and Energy Efficiency Improvement Guaranteed Loan and Grant Program include wind, solar, biomass and geothermal, and hydrogen derived from biomass or water using wind, solar, or geothermal energy sources. These grants are limited to 25% of a proposed project's cost, and a loan guarantee may not exceed $25 million. The combined amount of a grant and loan guarantee must be at least $5,000 (with the grant portion at least $1,500) and may not exceed 75% of the project’s cost. In general, a minimum of 20% of the funds available for these incentives will be dedicated to grants of $20,000 or less. For more information on grant, loan guarantees, loan financing, and opportunities for combinations thereof, visit the USDA website. In 2014, $12.3 million in grants and $56.4 million in loans was awarded. For a complete list of 2014 projects.

c. Grants and loans are generally available to state government entities, local governments, tribal governments, land-grant colleges and universities**, rural electric cooperatives and public power entities, and other entities, as determined by the USDA. To be eligible for REAP grants and loans, an applicant must have a satisfactory revenue stream and be in control the budget, operations, and maintenance of a project for the entire duration of the loan or grant. Rural small businesses must be located in rural areas, but agricultural producers may be located in non-rural areas. Eligible project costs include purchasing energy efficiency improvements or a renewable energy system, energy audits or assessments, permitting and licensing fees, and business plans and retrofitting. For new construction the replacement of older equipment with more efficient equipment may be eligible as a project cost only when a new facility is planned to be more efficient and similarly sized than the older facility. Working capital and land acquisition are only eligible

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for loan guarantees. Regional rural energy coordinators provide loan and grant applications upon request.

d. The Food, Conservation, and Energy Act of 2008 (H.R. 2419), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program,* into the Rural Energy for America Program (REAP). Similar to its predecessor, the REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the new program in the following amounts: $55 million for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, up to $25 million in discretionary funding may be issued each year. The American Taxpayer Relief Act of 2012 (H.R. 8) extended discretionary funding for FY 2013. The 2014 Farm Bill reauthorized the USDA to offer these programs and removed the mandate to offer grants for feasibility studies.

e. * The Renewable Energy Systems and Energy Efficiency Improvements Program was created by the USDA pursuant to Section 9006 of the 2002 federal Farm Security and Rural Investment Act of 2002. Funding in the amount of $23 million per year was appropriated for each fiscal year from FY 2003-2007. In March 2008, the USDA announced that it would accept $220.9 million in applications for grants, loan guarantees, and loan/grant combination packages under the Renewable Energy Systems and Energy Efficiency Improvements Program. The application deadline was June 16, 2008.

f. **Land grant colleges and universities are referred to above as "schools" and "institutions". It is important to note that K-12 schools are not eligible for this grant.

8. USDA- Rural Energy for America Program (Loan Guarantees) a. Note: The U.S. Department of Agriculture's Rural Development issues

periodic Notices of Solicitation of Applications for the Rural Energy for America Program (REAP) in the Federal Registry. The most recent solicitation for the REAP program was on May 5th, 2014 and can be viewed in the Federal Registry here. The next Notice of Funding Availability will be published in the Federal Registry and on the USDA website here. Notably, the 2014 Farm Bill removed authority for the USDA to fund REAP feasibility studies with REAP grants.

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b. The Rural Energy for America Program (REAP) provides financial assistance to agricultural producers and rural small businesses in rural America to purchase, install, and construct renewable energy systems, make energy efficiency improvements to non-residential buildings and facilities, use renewable technologies that reduce energy consumption, and participate in energy audits and renewable energy development assistance. Renewable energy projects for the Renewable Energy Systems and Energy Efficiency Improvement Guaranteed Loan and Grant Program include wind, solar, biomass and geothermal, and hydrogen derived from biomass or water using wind, solar, or geothermal energy sources. These grants are limited to 25% of a proposed project's cost, and a loan guarantee may not exceed $25 million. The combined amount of a grant and loan guarantee must be at least $5,000 (with the grant portion at least $1,500) and may not exceed 75% of the project’s cost. In general, a minimum of 20% of the funds available for these incentives will be dedicated to grants of $20,000 or less. For more information on grant, loan guarantees, loan financing, and opportunities for combinations thereof, visit the USDA website. In 2014, $12.3 million in grants and $56.4 million in loans was awarded. For a complete list of 2014 projects, click here.

c. Grants and loans are generally available to state government entities, local governments, tribal governments, land-grant colleges and universities**, rural electric cooperatives and public power entities, and other entities, as determined by the USDA. To be eligible for REAP grants and loans, an applicant must have a satisfactory revenue stream and be in control the budget, operations, and maintenance of a project for the entire duration of the loan or grant. Rural small businesses must be located in rural areas, but agricultural producers may be located in non-rural areas. Eligible project costs include purchasing energy efficiency improvements or a renewable energy system, energy audits or assessments, permitting and licensing fees, and business plans and retrofitting. For new construction the replacement of older equipment with more efficient equipment may be eligible as a project cost only when a new facility is planned to be more efficient and similarly sized than the older facility. Working capital and land acquisition are only eligible for loan guarantees. Regional rural energy coordinators provide loan and grant applications upon request.

d. The Food, Conservation, and Energy Act of 2008 (H.R. 2419), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program,* into the Rural Energy for America Program (REAP). Similar to its predecessor, the REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy

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efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the new program in the following amounts: $55 million for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, up to $25 million in discretionary funding may be issued each year. The American Taxpayer Relief Act of 2012 (H.R. 8) extended discretionary funding for FY 2013. The 2014 Farm Bill reauthorized the USDA to offer these programs and removed the mandate to offer grants for feasibility studies.

e. * The Renewable Energy Systems and Energy Efficiency Improvements Program was created by the USDA pursuant to Section 9006 of the 2002 federal Farm Security and Rural Investment Act of 2002. Funding in the amount of $23 million per year was appropriated for each fiscal year from FY 2003-2007. In March 2008, the USDA announced that it would accept $220.9 million in applications for grants, loan guarantees, and loan/grant combination packages under the Renewable Energy Systems and Energy Efficiency Improvements Program. The application deadline was June 16, 2008.

f. **Land grant colleges and universities are referred to above as "schools" and "institutions". It is important to note that K-12 schools are not eligible for this grant.

9. USDA- Repowering Assistance Biorefinery Program a. The Repowering Assistance Program provides payments to eligible

biorefineries to replace fossil fuels used to produce heat or power to operate the biorefineries with renewable biomass. Reimbursement payments are provided to offset a portion of the costs associated with the conversion of existing fossil fuel systems to renewable biomass fuel systems.The reimbursement amounts vary and are determined by the availability of funds, the project scope, and the ability of the proposed project to meet all the scoring criteria. In particular reimbursement amounts are calculated by the percentage reduction in fossil fuel used by the biorefinery, the quantity of fossil fuels replaced by a renewable biomass system, and the cost effectiveness of the renewable biomass system. The program will provide reimbursement payments for eligible project costs of the renewable biomass system during the construction phase of the repowering project. Up to 90% of the funds can be utilized during project construction, with the remaining 10% made upon demonstration of successful completion of the project. A maximum of 50% of the total project costs can be reimbursed, as long as amount does not exceed the maximum award for the fiscal year. Eligible

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technologies may include, but are not limited to, anaerobic digesters, processed steam, biomass boilers, or combined heat and power technologies (CHP). Applicants must demonstrate, at the time of application, that the proposed site has direct access to biomass or third party commitments to supply biomass for the repowering project for at least three years. Payments are made for eligible post-application costs incurred during the construction phase of the repowering project. Congress allocated $35 million for FY 2009, in addition to up to $15 million in discretionary funds annually beginning in FY 2009. The American Taxpayer Relief Act of 2012 extended discretionary funding through FY 2013.

10. Modified Accelerated Cost- Recovery System a. Note: Sec. 125 of H.R. 5771, the Tax Increase Prevention Act of 2014,

extended the "placed in service" date of the 50% bonus depreciation provision originally included in the American Recovery and Reinvestment Act of 2009 to December 31, 2014, and thus retroactively through the 2014 tax year.

b. Under the federal Modified Accelerated Cost-Recovery System (MACRS), businesses may recover investments in certain property through depreciation deductions. The MACRS establishes a set of class lives for various types of property, ranging from three to 50 years, over which the property may be depreciated. A number of renewable energy technologies are classified as five-year property (26 USC § 168(e)(3)(B)(vi)) under the MACRS, which refers to 26 USC § 48(a)(3)(A), often known as the energy investment tax credit or ITC to define eligible property. Such property currently includes*:

i. a variety of solar-electric and solar-thermal technologies ii. fuel cells and microturbines

iii. geothermal electric iv. direct-use geothermal and geothermal heat pumps v. small wind (100 kW or less)

vi. combined heat and power (CHP) vii. the provision which defines ITC technologies as eligible also adds the

general term "wind" as an eligible technology, extending the five-year schedule to large wind facilities as well.

c. In addition, for certain other types of renewable energy property, such as biomass or marine and hydrokinetic property, the MACRS property class life is seven years. Eligible biomass property generally includes assets used in the conversion of biomass to heat or to a solid, liquid or gaseous fuel, and to equipment and structures used to receive, handle, collect and process biomass in a waterwall, combustion system, or refuse-derived fuel system to create hot water, gas, steam and electricity. Marine and hydrokinetic property includes facilities that utilize waves, tides, currents, free-flowing water, or differentials

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in ocean temperature to generate energy. It does not include traditional hydropower that uses dams, diversionary structures, or impoundments.

d. The 5-year schedule for most types of solar, geothermal, and wind property has been in place since 1986. The federal Energy Policy Act of 2005 (EPAct 2005) classified fuel cells, microturbines and solar hybrid lighting technologies as five-year property as well by adding them to § 48(a)(3)(A). This section was further expanded in October 2008 by the addition of geothermal heat pumps, combined heat and power, and small wind under The Energy Improvement and Extension Act of 2008.

e. The federal Economic Stimulus Act of 2008, enacted in February 2008, included a 50% first-year bonus depreciation (26 USC § 168(k)) provision for eligible renewable-energy systems acquired and placed in service in 2008. The allowance for bonus depreciation has since been extended and modified several times since the original enactment, most recently in December 2014 by the Tax Increase Prevention Act Of 2014 (H.R. 5771, Sec. 125). This legislation extended the "in-service" provision for qualifying property through to December 31, 2014, and thus also did so retroactively for property placed in service after December 31, 2013, through to enactment.

f. The 50% first-year bonus depreciation provision enacted in 2008 was extended (retroactively for the entire 2009 tax year) under the same terms by the American Recovery and Reinvestment Act of 2009 (H.R. 1), enacted in February 2009. It was renewed again in September 2010 (retroactively for the entire 2010 tax year) by the Small Business Jobs Act of 2010 (H.R. 5297). In December 2010 the provision for bonus depreciation was amended and extended yet again by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (H.R. 4853). Under these amendments, eligible property placed in service after September 8, 2010 and before January 1, 2012 was permitted to qualify for 100% first-year bonus depreciation. The December 2010 amendments also permitted bonus depreciation to be claimed for property placed in service during 2012, but reverted the allowable amount from 100% to 50% of the eligible basis. The 50% first-year bonus depreciation allowance was further extended for property placed in service during 2013 by the American Taxpayer Relief Act of 2012 (H.R. 8, Sec. 331) in January 2013. As noted above, the Tax Increase Prevention Act Of 2014 (H.R. 5771, Sec. 125), extended these provisions through to December 31, 2014, and thus retroactively for the 2014 tax year.

g. *Note that the definitions of eligible technologies included in this entry are somewhat simplified versions of those contained in tax code, which often contain additional caveats, restrictions, and modifications. Those interested in

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this incentive should review the relevant sections of the code in detail prior to making business decisions.

11. Energy- Efficient Commercial Buildings Tax Deduction a. Note: This tax deduction expired at the end of 2013. The Tax Increase

Prevention Act of 2014 retroactively reinstated the tax credit for projects completed in 2014.

b. The federal Energy Policy Act of 2005 established a tax deduction for energy-efficient commercial buildings applicable to qualifying systems and buildings placed in service from January 1, 2006, through December 31, 2007. This deduction was subsequently extended through 2008, and then again through 2013 by Section 303 of the federal Energy Improvement and Extension Act of 2008 (H.R. 1424, Division B), enacted in October 2008. A tax deduction of $1.80 per square foot is available to owners of new or existing buildings who install (1) interior lighting; (2) building envelope, or (3) heating, cooling, ventilation, or hot water systems that reduce the building’s total energy and power cost by 50% or more in comparison to a building meeting minimum requirements set by ASHRAE Standard 90.1-2001. Energy savings must be calculated using qualified computer software approved by the IRS. Click here for the list of approved software. Deductions of $0.60 per square foot are available to owners of buildings in which individual lighting, building envelope, or heating and cooling systems meet target levels that would reasonably contribute to an overall building savings of 50% if additional systems were installed. The deductions are available primarily to building owners, although tenants may be eligible if they make construction expenditures. In the case of energy efficient systems installed on or in government property, tax deductions will be awarded to the person primarily responsible for the system's design. Deductions are taken in the year when construction is completed. The IRS released interim guidance (IRS Notice 2006-52) in June 2006 to establish a process to allow taxpayers to obtain a certification that the property satisfies the energy efficiency requirements contained in the statute. IRS Notice 2008-40 was issued in March of 2008 to further clarify the rules. NREL published a report (NREL/TP-550-40228) in February 2007 which provides guidelines for the modeling and inspection of energy savings required by the statute.

12. USDA- High Energy Cost Grant Program a. NOTE: The most recent solicitation for this program closed August 1, 2014.

Please check the program website for information on future solicitations. b. The U.S. Department of Agriculture (USDA) offers an ongoing grant program

for the improvement of energy generation, transmission, and distribution facilities in rural communities. This program began in 2000. Eligibility is

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limited to projects in communities that have average home energy costs at least 275% above the national average. Individuals, non-profits, commercial entities, state and local governments (including any agency or instrumentality thereof), and tribal governments are eligible for this grant. Individuals must work on a project that will benefit the community in order to qualify. Under the most recent solicitation for projects, a total of $7 million was available for qualifying projects. Under this solicitation grants ranging from $50,000 to $3 million were available for a variety of activities, including:

i. Electric generation, transmission, and distribution facilities; ii. Natural gas or petroleum storage or distribution facilities;

iii. Renewable energy facilities used for on-grid or off-grid electric power generation, water or space heating, or process heating and power;

iv. Backup up or emergency power generation or energy storage equipment; and

v. Weatherization of residential and community property, or other energy efficiency or conservation programs.

c. This grant program is not limited to renewable energy or energy conservation and efficiency measures, but these measures are eligible for this grant program.

13. Incentives for Energy Cost Grant Program a. NOTE: The most recent solicitation for this program closed August 1, 2014.

Please check the program website for information on future solicitations. b. The U.S. Department of Agriculture (USDA) offers an ongoing grant program

for the improvement of energy generation, transmission, and distribution facilities in rural communities. This program began in 2000. Eligibility is limited to projects in communities that have average home energy costs at least 275% above the national average. Individuals, non-profits, commercial entities, state and local governments (including any agency or instrumentality thereof), and tribal governments are eligible for this grant. Individuals must work on a project that will benefit the community in order to qualify. Under the most recent solicitation for projects, a total of $7 million was available for qualifying projects. Under this solicitation grants ranging from $50,000 to $3 million were available for a variety of activities, including:

i. Electric generation, transmission, and distribution facilities; ii. Natural gas or petroleum storage or distribution facilities;

iii. Renewable energy facilities used for on-grid or off-grid electric power generation, water or space heating, or process heating and power;

iv. Backup up or emergency power generation or energy storage equipment; and

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v. Weatherization of residential and community property, or other energy efficiency or conservation programs.

c. This grant program is not limited to renewable energy or energy conservation and efficiency measures, but these measures are eligible for this grant program.

14. Incentives for Energy Independence a. In August 2007 Kentucky established the Incentives for Energy Independence

Act to promote the development of renewable energy and alternative fuel facilities, energy efficient buildings, alternative fuel vehicles, research & development activities and other energy initiatives. For renewable energy facilities, the bill provides incentives to companies that build or renovate facilities that utilize renewable energy, which may include:

i. up to 100% of the Kentucky income tax or the limited liability entity tax

ii. sales and use tax incentives of up to 100% iii. a wage assessment of up to 4% for associated employees iv. advanced disbursement of post-construction incentives

b. A renewable energy facility is defined as one that generates at least 50 kW of electricity from solar power or at least 1 MW from wind power, biomass resources, landfill gas, hydropower or similar renewable resources. The electricity must be sold to an unrelated party. The minimum investment in any renewable energy facility must be $1 million in capital expenditure which is defined to include various non-capital costs such as labor. The tax credit allows approved facilities to receive a credit up to 100% of Kentucky income tax and the limited liability tax for projects that construct, retrofit or upgrade facilities that generate power from renewable resources. In addition, companies may also receive a sales tax incentive of up to 100% of the Kentucky sales and use tax paid (on or after the activation date) on materials, machinery and equipment used to construct, retrofit or upgrade an eligible project. Approved companies may also require that employees whose jobs were created as a result of the associated project, as a condition of employment, agree to pay a wage assessment of up to 4% of their gross wages. Employees will be allowed a Kentucky income tax credit equal to the assessment withheld from their wages. The maximum recovery for a single project from all incentives, including the income and liability entity tax credit, sales tax refund and the wage assessment, may not exceed 50% of the capital investment. Prior to making any capital investments in a project, each eligible company must submit an application for incentives to the Kentucky Economic Development Finance Authority. There is a $1,000 application fee. Each incentive contract is negotiated on a case-by-case basis to determine the

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conditions and termination date of the project, not to exceed 25 years from the project's activation date. There is also a 0.25% administrative fee assessed after the final incentives package is settled (capped at $50,000).

15. Sales Tax Exemption for Manufacturing Facilities a. In August 2007 Kentucky established the Incentives for Energy Independence

Act to promote the development of renewable energy and alternative fuel facilities, energy efficient buildings, alternative fuel vehicles, research & development activities and other energy initiatives. This includes a sales tax exemption, which allows manufacturers to apply for a refund for the amount of sales or use tax paid on the purchase of new, or replacement equipment for renewable energy or energy efficiency projects. Energy efficiency projects must decrease the measurable amount of energy used by the facility by at least 15% percent while maintaining or increasing the production for the same period. The types of equipment that are allowable under this policy are not specified, but the program explicitly excludes improvements to buildings (w.g. windows, lighting) and replacement parts. Project should reduce consumption of energy or energy-producing fuels in the manufacturing process. The manufacturer must file an application for pre-approval with the Department of Revenue (Application 51A300) prior to purchasing new or replacement equipment, and should initiate the process with the Kentucky Cabinet for Economic Development. This incentive applies to equipment purchased on or after July 1, 2008.

16. Energy Efficiency Tax Credits (Corporate) a. In April 2008, Kentucky enacted legislation establishing a 30% state income

tax credit for taxpayers that install certain energy efficiency measures on commercial property. The 30% credit (up to $500) is allowable against individual, corporate income or limited liability income taxes for any of the following equipment:

i. Energy-Efficient Heating Ventilating and Air Conditioning (HVAC) or Hot Water System

ii. Interior Lighting Systems b. The total tax credit may not exceed $1,000 for any combination of HVAC, hot

water, and lighting systems. It should be noted that there is a separate tax credit (up to $400) available for taxpayers who sell an Energy Star manufactured home, and $800 for an Energy Star home; however if a taxpayer takes that tax credit he/she is not eligible for the other efficiency tax credits described in this summary. The legislation defines an energy efficient lighting system as an interior lighting system that meets the maximum reduction in lighting power density requirements for the federal energy efficient commercial building deduction under 26 U.S.C. sec. 179D, as in effect

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December 31, 2007; and it defines an energy-efficient heating, cooling, ventilation, or hot water system as a system that meets the requirements for the federal energy-efficient commercial building deduction under 26 U.S.C. sec. 179D, as in effect December 31, 2007. See guidance issued by the Kentucky Department of Revenue (DOR) for additional information. Kentucky also allows 30% personal tax credit for energy efficiency improvements made to the taxpayer's principal residence.

c. To claim the tax credit, use Form 5695-K - Kentucky Energy Efficiency Products Tax Credit - Form 41A720-S7 available on the Kentucky Department of Revenue website. Also available on the Kentucky DOR website is the 8908-K Kentucky Energy Star (Homes and Manufactured Homes) Tax Credit, Form 41A720-S11 for the Energy Star Home tax credit. These credits may be applied during taxable years 2009-2015.

17. Renewable Energy Tax Credits (Corporate) a. In April 2008, Kentucky enacted legislation establishing a 30% state income

tax credit for certain solar, wind and geothermal installations on single or multi-family residences and on commercial property. Kentucky corporate taxpayers may take the 30% credit on any of the following equipment installed on commercial property:

i. Active or passive solar space-heating systems ii. Combined active solar space-heating and water-heating systems

iii. Solar hot water systems iv. Wind turbines

b. In addition, Kentucky corporate taxpayers may take a credit equal to $3 per watt (DC) of rated capacity for the installation of a photovoltaic (PV) system. Solar and wind technologies have a maximum tax credit of $500 if installed on a single family residential rental unit, and $1,000 for multi-family residential rental units or commercial property. Kentucky corporate taxpayers may also take a 30% tax credit, up to $250, for closed-loop geothermal heat pumps, open-loop geothermal heat pumps, direct expansion (DX) geothermal heat pumps installed on single or multi-family rental residential properties which they own. This is not applicable to any other commercial property. To be eligible, wind and solar hot water equipment must have a manufacturer’s warranty of five years or more. Solar hot water systems must also have an installer's warranty of two years or more, and must use collectors certified by the Solar Rating and Certification Corporation (SRCC) under OG-100. Solar energy systems must be installed by a North American Board of Certified Energy Practitioners (NABCEP)-certified installer. PV panels and inverters must meet article 690 of the National Electrical Code (NEC) and be certified by Underwriters Laboratories (UL). Wind turbines must meet the wind

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industry consensus standards developed by the American Wind Energy Association (AWEA) and U.S. Department of Energy. Wind turbines must also meet the requirements of article 705 of the NEC, and must be UL-certified. Geothermal systems must meet certain guidelines for their Energy Efficiency Ratio (EER) and Coefficient of Performance (COP).

c. The credit may be carried forward for one year. It is effective for taxable years

2009-2015. To claim the tax credit, use Form 5695-K - Kentucky Energy Efficiency Products Tax Credit - Form 41A720-S7 available on the Kentucky Department of Revenue web site.

18. TVA- Mid-Sized Renewable Standard Offer Program

a. The Tennessee Valley Authority (TVA) now compliments the small generation Green Power Providers Program by providing incentives for mid-sized renewable energy generators between 50kW and 20MW to enter into long term price contracts. The goal for total production from all participants is 100MW, with no more than 50MW from any one renewable technology. The Renewable Standard Offer program also includes Solar Solution Initiative program that offers additional financial incentives for Solar Photovoltaic (PV) projects. TVA bases the standard offer for customer generators off of a seasonal time-of-day averages chart, which sets base prices for the term of the contract. For projects approved after January 2015, prices increase at a rate of 5% per year beginning in 2016 and may be changed with 90 days’ notice by TVA (no more than 1% per year). For 2015, the average price is expected range between $0.029/kWh during low demand periods to $0.051/kWh during high demand periods. Learn more about pricing here. Generation is recorded monthly through metering equipment installed by TVA and paid for by the participant. All energy output, Renewable Energy Credits (RECs), or other environmental attributes from installations under this program belong to TVA, and all marketing of the program should indicate that TVA (not the power seller) consumes all of the energy from these renewable energy projects. Biomass, Wind, or Photovoltaics can be interconnected through either TVA's transmission system or partners' distribution systems under 10, 15, or 20 year contracts. Biomass should co-fire 50% or more with the fuel consumption content approved by TVA and separately metered. The remainder of the biomass production can be purchased through the TVA's Dispersed Power Production Program. Before approval, the seller must provide TVA with project financing arrangements, interconnection agreements between the seller and either TVA or a Distributor, and TVA metering installation plans at an environmentally acceptable location. The

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participating power producer is responsible for interconnection, performance assurance, and application costs. TVA, or an approved third party, will also perform an environmental review at the seller’s cost.

19. TVA- Solar Solutions Initiative a. Solar Solutions Initiative (SSI) is a pilot program that offers additional

financial incentives for Solar PV systems participating in the Renewable Standard Offer program. Applications for new projects for the year 2015 will open on January 2, 2015. Participants applying for the Solar Solutions Incentive program are required to apply through the Renewable Standard Offer program. The program offers performance-based incentive of $0.04/kWh for the first 10 years after the project is operational. This incentive is additional to the seasonal and time-of-day price for electricity offered through the Renewable Standard Offer program. The total capacity for the program for the year 2015 is capped at 20 MW with set aside of 12 MW for traditional SSI participants, 4 MW for projects between 50kW- 200kW and 4MW for LPC participants. Aside from the 2015 capacity of 20MW, the program has offered total cumulative capacity of 36MW since its inception in 2012.

20. TVA- Green Power Providers a. Note: Enrollment for 2015 was conducted from January 26th to February

13th. b. Tennessee Valley Authority (TVA) and participating power distributors of

TVA power offer a performance-based incentive program to homeowners and businesses for the installation of renewable generation systems from the following qualifying resources: PV, wind, hydropower, and biomass. The long term Green Power Providers program replaces the Generation Partners* pilot program. The energy generated from these renewable generation systems will count towards TVA's green power pricing program, Green Power Switch. The Green Power Providers program contract term is 20 years. For years 1-10, TVA will purchase 100% of the output from qualifying systems at a premium of $0.02** per kilowatt-hour (kWh) on top of the retail electricity rate. Participants will be paid only the applicable retail rate for years 11-20 of the contract. Premium payments will be reviewed annually by TVA, with plans to phase these payments out over the life of the program. All new participants in the Generation Power Providers program will receive a $1,000 incentive to offset the upfront cost. Participation in the Generation Power Providers program is subject to annual limits imposed by TVA and based upon available budget, the value of renewable technologies to TVA and renewable energy market conditions. Eligible Systems must not have previously generated renewable energy for sale to TVA prior to October 1, 2012, unless the system

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was part of the Generation Partners pilot. TVA will retain all rights to all renewable energy credits and any other environmental attributes provided by system. Payment is made by either the Distributor Billing Option or the TVA-Vendor Direct Billing Option. With the Distributor Billing Option, a generation credit is issued by the local power company on the monthly power bill for the home or business where the generation system is located. If a qualifying system produces more electricity than the customer consumes, payment for any excess credits will be issued either monthly or annually, at the discretion of the power company. With the TVA-Vendor Direct Billing Option, participants receive the retail-rate portion of their monthly generation credit from the local power company and the premium rate is issued through a TVA-designated third party vendor. Qualifying systems will have a minimum total nameplate generation capacity (DC) of 500 watts (W) and a maximum of 50 kilowatts (kW). Systems over 50kW may qualify to participate in TVA’s Mid-Sized Renewable Standard Offer program (link to DSIRE summary). Systems greater than 10 kilowatts in size will be subject to a load requirement. A “load requirement” simply means that the system’s maximum capacity will be limited so that it should not generate more than 100% of the energy usage or consumption at the home or business. TVA will conduct annual program evaluations to set annual MW limits to the program. These limits will be made available on the Generation Power Providers web site. A limit of 11.33 MW limit including 4 MW of residential capacity and 7.33 MW of non-residential capacity is available for the program. Installations must comply with local codes and adhere to guidelines established by the program. All equipment must be in compliance with environmental regulations and national standards, certified by a licensed electrician, and meet all applicable codes. Systems must be dual-metered, have an external disconnect switch, be grid-tied, and be validated under an interconnection agreement.

c. * Existing Generation Partners participants may qualify for a 10-year contract extension to be paid at retail prices.

d. **Prices reflect Premium Rates for 2015 Calendar Year and are applicable for agreements executed and dated by TVA on or after January 1, 2015 but on or prior to December 31, 2015. Premium amounts are annually published in the Green Power Provider Guidelines.

21. TVA- Energy Right Solutions for Business a. TVA offers the Energy Right Solutions Program to commercial and industrial

facilities. In addition to prescriptive rebates for lighting, motors, HVAC, and kitchen equipment, administrators take a custom baseline of pre-installation demand and compare to post installation measurements to determine the financial incentive amount in kilowatt-hour values. The incentives program is

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offered along with complimentary energy assessments and reviews to determine potential areas for savings. Customers can work with designers and installers to develop a project plan and complete a participation application form. Participants should receive a pre-installation incentive notification letter before removing any existing equipment.

22. Duke Energy- Non Residential Energy Efficiency Rebate Program a. Duke Energy offers a variety of incentives through its “Smart $aver Incentive

Program” for commercial and industrial customers installing energy efficient equipment in their facilities. Any of Duke Energy’s commercial or industrial customers not on the TT rate (Time-of-Day Rate for Service at Transmission Voltage) qualify for these prescriptive rebates. There are many eligible technologies, with varying rebate amounts, available for rebates, such as lighting equipment, cooling equipment, motors, pumps, food service equipment, and manufacturing process equipment. Incentives are paid on a "first-come, first-served" basis up to $50,000 per fiscal year (July 1 through June 30) per facility. Applications, found on the website above, should be completed and submitted within 90 days after equipment has been installed.

b. Schools (K-12) are also eligible under this program, however the application

process is different and the incentive is capped at $100,000/school per fiscal year.

Tennessee (back to top) 1. USDA- Biorefinery Assistance Program

a. USDA Rural Development is offering loan guarantees for the development, construction, and retrofitting of commercial-scale biorefineries. Eligible borrowers include individuals, entities, Indian tribes, state or local governments, corporations, farm cooperatives or farm cooperative organizations, associations of agricultural producers, National Laboratories, institutions of higher education, rural electric cooperatives, public power entities, and consortium of any of these types of entities. Financed entities must provide at least 20% of the financing for eligible project costs, and applications for funding must include an independent feasibility study and technical assessment. Eligible project costs include the purchase and installation of equipment, construction or retrofitting costs, permit and licensing fees, working capital, land acquisition, and the costs of financing. The project must meet the following requirements:

i. Must be for the development and construction or the retrofitting of a commercial-scale biorefinery using an eligible technology

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ii. Must use an eligible feedstock for the production of advanced biofuels and biobased products

iii. The majority of the production must be an advanced biofuels b. Eligible advanced biofuels include:

i. Biofuel derived from cellulose, hemicellulose, or lignin, or other fuels derived from cellulose

ii. Biofuel derived from sugar, starch, excluding ethanol derived from corn kernel starch

iii. Biofuel derived from waste material, including crop residue, vegetative waste material, animal waste, food waste, and yard waste

iv. Diesel fuel derived from renewable biomass, including vegetable oil and animal fat

v. Biogas, including landfill gas and sewage waste treatment gas, produced through the conversion of organic matter from renewable biomass

c. In 2014, "renewable chemicals” and "biofuels" were added to this program under the name of Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program to provide guaranteed loans for the development and construction of commercial-scale biorefineries or for the retrofitting of existing facilities using eligible technology for the development of advanced biofuels. Congress allocated $75 million for FY 2009 and $245 million for FY 2010, in addition to up to $150 million in discretionary funds annually beginning in FY 2009. The American Taxpayer Relief Act of 2012 extended discretionary funding through FY 2013. For FY 2014, approximately $76 million in carry over budget will support a program level of approximately $181 million.

d. Forms must be submitted by January 30th of each program year to compete for funds.

2. Business Energy Investment Tax Credit a. Note: IRS Notice 2015-4 included new certification requirements for small

wind turbines placed in service after January 26, 2015. Small wind turbines must now meet the performance and quality standards set forth by either the American Wind Energy Association Small Wind Turbine Performance and Safety Standard 9.1-2009 (AWEA), or the International Electrotechnical Commission 61400-1, 61400-12, and 61400-11 (IEC)

b. The federal business energy investment tax credit available under 26 USC § 48 was expanded significantly by the Energy Improvement and Extension Act of 2008 (H.R. 1424), enacted in October 2008. This law extended the duration -- by eight years -- of the existing credits for solar energy, fuel cells and microturbines; increased the credit amount for fuel cells; established new

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credits for small wind-energy systems, geothermal heat pumps, and combined heat and power (CHP) systems; allowed utilities to use the credits; and allowed taxpayers to take the credit against the alternative minimum tax (AMT), subject to certain limitations. The credit was further expanded by the American Recovery and Reinvestment Act of 2009, enacted in February 2009.

c. In general, the following credits are available for eligible systems placed in service on or before December 31, 2016*:

i. Solar. The credit is equal to 30% of expenditures, with no maximum credit. Eligible solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. Hybrid solar lighting systems, which use solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight, are eligible. Passive solar systems and solar pool-heating systems are not eligible.

ii. Fuel Cells. The credit is equal to 30% of expenditures, with no maximum credit. However, the credit for fuel cells is capped at $1,500 per 0.5 kilowatt (kW) of capacity. Eligible property includes fuel cells with a minimum capacity of 0.5 kW that have an electricity-only generation efficiency of 30% or higher. (Note that the credit for property placed in service before October 4, 2008, is capped at $500 per 0.5 kW.)

iii. Small Wind Turbines. The credit is equal to 30% of expenditures, with no maximum credit for small wind turbines placed in service after December 31, 2008. Eligible small wind property includes wind turbines up to 100 kW in capacity. (In general, the maximum credit is $4,000 for eligible property placed in service after October 3, 2008, and before January 1, 2009. The American Recovery and Reinvestment Act of 2009 removed the $4,000 maximum credit limit for small wind turbines.) Small wind turbines must meet the performance and quality standards set forth by either the American Wind Energy Association Small Wind Turbine Performance and Safety Standard 9.1-2009 (AWEA), or the International Electrotechnical Commission 61400-1, 61400-12, and 61400-11 (IEC)

iv. Geothermal Systems. The credit is equal to 10% of expenditures, with no maximum credit limit stated. Eligible geothermal energy property includes geothermal heat pumps and equipment used to produce, distribute or use energy derived from a geothermal deposit. For electricity produced by geothermal power, equipment qualifies only up to, but not including, the electric transmission stage. For geothermal heat pumps, this credit applies to eligible property placed in service

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after October 3, 2008. Note that the credit for geothermal property, with the exception of geothermal heat pumps, has no stated expiration date.

v. Microturbines. The credit is equal to 10% of expenditures, with no maximum credit limit stated (explicitly). The credit for microturbines is capped at $200 per kW of capacity. Eligible property includes microturbines up to two megawatts (MW) in capacity that have an electricity-only generation efficiency of 26% or higher.

vi. Combined Heat and Power (CHP). The credit is equal to 10% of expenditures, with no maximum limit stated. Eligible CHP property generally includes systems up to 50 MW in capacity that exceed 60% energy efficiency, subject to certain limitations and reductions for large systems. The efficiency requirement does not apply to CHP systems that use biomass for at least 90% of the system's energy source, but the credit may be reduced for less-efficient systems. This credit applies to eligible property placed in service after October 3, 2008.

d. In general, the original use of the equipment must begin with the taxpayer, or the system must be constructed by the taxpayer. The equipment must also meet any performance and quality standards in effect at the time the equipment is acquired. The energy property must be operational in the year in which the credit is first taken. Significantly, the American Recovery and Reinvestment Act of 2009 repealed a previous restriction on the use of the credit for eligible projects also supported by "subsidized energy financing." For projects placed in service after December 31, 2008, this limitation no longer applies. Businesses that receive other incentives are advised to consult with a tax professional regarding how to calculate this federal tax credit.

e. * A number of changes to this credit are scheduled to take effect for systems placed in service after December 31, 2016. The credit for equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat will decrease from 30% to 10%. The credit for geothermal heat pumps, hybrid solar lighting, small wind, fuel cells, microturbines, and combined heat and power systems will expire. The credit amount for equipment which uses geothermal energy to produce electricity will remain at 10%.

3. Sales Tax Credit for Clean Energy Technology a. Tenn. Code Ann. Section 67-6-346 allows a taxpayer to take a credit, to apply

for a refund of taxes paid, or to apply for authority to make tax-exempt purchases of machinery and equipment used to produce electricity in a certified green energy production facility. A certified green energy production

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facility is a facility certified by the Department of Environment and Conservation as producing electricity for use and consumption off the premises using clean energy technology. Clean energy technology is technology used to generate electricity from geothermal, hydrogen, solar, or wind sources. A contractor who is installing pollution control or green energy machinery and equipment must file an application with the department and must attach a copy of the contract to its application. The taxpayer who hires a contractor must also file an application with the department. If both applications are approved, authority to purchase tax exempt will be extended to the contractor for the certified green energy production facility project described in the application. If taxes have been paid, the approved application will be used to support a refund or credit directly to the taxpayer.

4. Green Energy Property Tax Assessment a. Tennessee offers a special ad valorem property tax assessment for certified

green energy production facilities. Tennessee Code Annotated § 67-5-601 (e)-(f) defines the sound, intrinsic and immediate value of alternative green source properties when they are initially appraised. SB 1000 stipulated that the assessed property value of all certified green energy production facilities (as defined in Tenn. Code § 67-4-2007) may not exceed 1/3 of total installed costs for wind, 12.5% of installed costs for solar, and for other green sources of energy, property should not initially exceed its appropriate capacity factor as determined by the States Board of Equilization in consultation with the department of environment and conservation. TDEC defines and certifies facilities based upon production of electricity using clean energy technology for use and consumption off the premises. Clean energy technology is defined as technology used to generate energy from geothermal, hydrogen, solar, and wind sources. The effective date of the property valuation provided is January 1st of the year for which the valuation is claimed. A copy of the facility certification must be provided by the property owner to the comptroller's office by March 1st of the same year. The comptroller must advise the assessor of the locations of any certified green energy property and must advise the assessor as to whether the property should be assessed locally or centrally.

5. Renewable Electricity Production Tax Credit a. Note: In December 2014, The Tax Increase Prevention Act of 2014 extended

the expiration date for this tax credit to December 31, 2014. Projects that are not under construction prior to January 1, 2015, are ineligible for this credit. In March 2015, IRS Notice 2015-25 extended the Continuous Construction Test and Continuous Efforts Test (used to determine if a project commencing

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construction before the end of 2014 is eligible for the PTC) by 1 year to January 1, 2017.

b. The federal renewable electricity production tax credit (PTC) is an inflation-adjusted per-kilowatt-hour (kWh) tax credit for electricity generated by qualified energy resources and sold by the taxpayer to an unrelated person during the taxable year. Originally enacted in 1992, the PTC has been renewed and expanded numerous times, most recently by the American Recovery and Reinvestment Act of 2009 (H.R. 1 Div. B, Section 1101 & 1102) in February 2009 (often referred to as "ARRA"), the American Taxpayer Relief Act of 2012 (H.R. 8, Sec. 407) in January 2013, and the Tax Increase Prevention Act of 2014 (H.R. 5771, Sec. 155) in December 2014.

c. The tax credit amount is $0.015 per kWh in 1993 dollars for some technologies and half of that amount for others. The amount is adjusted for inflation by multiplying the tax credit amount by the inflation adjustment factor for the calendar year in which the sale occurs, rounded to the nearest 0.1 cents. The Internal Revenue Service (IRS) publishes the inflation adjustment factor no later than April 1 each year in the Federal Registrar. (For 2014, the inflation adjustment factor used by the IRS is 1.5088.) The table below outlines the credit amount as it applies to different resource types. The table includes changes made by H.R. 8 in January 2013, and the inflation-adjusted credit amounts are current for the 2014 calendar year, as published in the IRS Notice 2014-36.

Resource Type Credit Amount

Wind $0.023/kWh Closed-Loop Biomass

$0.023/kWh

Open-Loop Biomass

$0.011/kWh

Geothermal Energy

$0.023/kWh

Landfill Gas $0.011/kWh Municipal Solid Waste

$0.011/kWh

Qualified Hydroelectric

$0.011/kWh

Marine and Hydrokinetic

$0.011/kWh

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d. The duration of the credit is generally 10 years after the date the facility is placed in service, but there are two exceptions:

i. open-loop biomass, geothermal, small irrigation hydro, landfill gas, and municipal solid waste combustion facilities placed into service after October 22, 2004, and before enactment of the Energy Policy Act of 2005, on August 8, 2005, are only eligible for the credit for a 5-year period, and

ii. open-loop biomass facilities placed in service before October 22, 2004, are eligible for the 5-year period beginning January 1, 2005.

e. The credit is claimed by completing Form 8835, "Renewable Electricity Production Credit," and Form 3800, "General Business Credit." For more information, contact IRS Telephone Assistance for Businesses at 1-800-829-4933.

f. The Tax Increase Prevention Act of 2014 (H.R. 5771, Sec. 155) extended both the PTC and permission for PTC-eligible facilities to claim the Investment Tax Credit in lieu of the PTC through the end of 2014. (Prior to the legislation, the PTC had expired December 31, 2013.) Although not enacted until December 2014, the effective date is January 1, 2014, meaning any qualifying project that commenced construction at any point in 2014 is eligible to claim the PTC. The American Taxpayer Relief Act of 2012 revised the PTC by removing "placed in service" deadlines and replacing them with deadlines that use the commencing of construction as a basis for determining facility eligibility. It also contained language revising the definition of the term "municipal solid waste" to exclude "paper that is commonly recycled and which has been segregated from other solid waste.” The definition change for municipal solid waste applies to electricity produced and sold after the enactment date of the legislation (January 2, 2013) in taxable years ending after that date.

g. To claim the PTC, construction on an eligible project must have “commenced construction” prior to January 1, 2015. The IRS has issued guidance on how it will evaluate whether construction has commenced in IRS Notices 2013-29, 2013-60, 2014-46, and 2015-25 (please see the full text of these notices for complete information on determining the commencing of construction). The guidelines establish two methods—a “physical work” test and a 5% safe harbor (see sections below for details)—to determine when construction has begun on a qualified facility. Meeting the criteria of either method is sufficient to demonstrate that construction has commenced. Both methods require that a taxpayer make continuous progress towards completion once construction has begun by meeting the Continuous Construction Test (to satisfy the Physical Work Test) or the Continuous Efforts Test (to satisfy Safe Harbor). For

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projects beginning construction before the end of 2014 and placed in service before January 1, 2017, the facility will be considered to satisfy the Continuous Construction Test or the Continuous Efforts Test, regardless of the amount of physical work performed or the amount of costs paid or incurred (Notice 2015-25).

h. The physical work test provides that a taxpayer may establish the beginning of construction by beginning "physical work of a significant nature.” The physical work test is based on the nature of the work performed rather than the cost of the work; if the work performed is of a significant nature, then “there is no fixed minimum amount of work or monetary or percentage threshold required to satisfy the Physical Work Test” (Notice 2014-46). Notice 2013-29 provides several examples of actions that constitute work of a significant nature, including:

i. for a facility that produces electricity from a wind turbine, the beginning of the excavation for the foundation, the setting of anchor bolts into the ground, or the pouring of the concrete pads of the foundation;

ii. physical work on a custom-designed transformer that steps up the voltage of electricity produced at the facility to the voltage needed for transmission; and

iii. beginning construction of roads integral to the activity performed by the facility including onsite roads used for moving materials to be processed (e.g., biomass) and roads for equipment to operate and maintain the facility.

i. Safe Harbor with respect to a facility is demonstrated by showing that 5% or more of the total cost of the facility was paid or incurred before January 1, 2015. If less than 5% of the total cost of the facility was paid or incurred prior to January 1, 2015, Safe Harbor is not fully satisfied; however, if a taxpayer paid or incurred at least 3%, the Safe Harbor may be satisfied and the PTC (or ITC) may be claimed with respect to some, but not all, of the individual facilities comprising the project. Specifically, “a taxpayer may claim the PTC or ITC on any number of individual facilities as long as the total aggregate cost of those individual facilities at the time the project is placed in service is not greater than 20 times the amount the taxpayer paid or incurred before” January 1, 2015 (Notice 2014-46).

6. USDA- Rural Energy for America Program (Energy Audit and Renewable Energy Development Assistance

a. Note: The U.S. Department of Agriculture's Rural Development periodically issues Notices of Solicitation of Applications for the Rural Energy for America Program (REAP) in the Federal Registry. The most recent

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solicitation for the REAP program was on December 29th, 2014 and can be viewed in the Federal Registry here.

b. The Renewable Energy for America Program (REAP) Energy Audit and Renewable Energy Development Assistance Program (EA/REDA) provides assistance to agricultural producers and rural small businesses for energy audits and renewable energy technical assistance including renewable energy site assessments. Applicants must submit separate applications for assistance, limited to one energy audit and one REDA per fiscal year. The maximum aggregate amount of an energy audit and REDA grant in a Federal fiscal year* is $100,000. In 2015, $2 Million in EA/REDA grant funding is available. Eligible project costs for eligible applicants includes salaries directly related to the project, travel expenses directly related to conducting energy audits or renewable energy development assistance, office supplies (e.g., paper, pens, file folders), administrative expenses, up to a maximum of 5 percent of the grant, which include but are not limited to utilities, office space, operation expenses of office and other project related equipment. Land grant colleges and universities are referred to above as schools, public universities, and institutions; K-12 schools are not eligible for this grant.

c. The 2014 Agricultural Act (2014 Farm Bill) authorized the Rural Energy for America Program with $50 Million in mandatory funding each fiscal year. USDA overhauled the Rural Energy for America Program although the core program remains largely the same. One major change includes a 3 tiered application structure including 1) total project costs of $80,000 or less, 2) total project costs more than $80,000 but less than $200,000, and, 3) total project costs of $200,000 or greater. Grant applications of $20,000 or less will compete in 5 competitions (Congress required 20% of funding to be used for small grants of $20,000 or less). The Food, Conservation, and Energy Act of 2008 (H.R. 2419), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program,* into the Rural Energy for America Program (REAP). Similar to its predecessor, REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the program in the following amounts: $55 million for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, up to $25 million in discretionary funding may be issued each

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year. The American Taxpayer Relief Act of 2012 (H.R. 8) extended discretionary funding for FY 2013.

7. USDA- Rural Energy for America Program (Grants) a. Note: The U.S. Department of Agriculture's Rural Development issues

periodic Notices of Solicitation of Applications for the Rural Energy for America Program (REAP) in the Federal Registry. The most recent solicitation for the REAP program was on May 5th, 2014 and can be viewed in the Federal Registry here. The next Notice of Funding Availability will be published in the Federal Registry and on the USDA website here. Notably, the 2014 Farm Bill removed authority for the USDA to fund REAP feasibility studies with REAP grants.

b. The Rural Energy for America Program (REAP) provides financial assistance to agricultural producers and rural small businesses in rural America to purchase, install, and construct renewable energy systems, make energy efficiency improvements to non-residential buildings and facilities, use renewable technologies that reduce energy consumption, and participate in energy audits and renewable energy development assistance. Renewable energy projects for the Renewable Energy Systems and Energy Efficiency Improvement Guaranteed Loan and Grant Program include wind, solar, biomass and geothermal, and hydrogen derived from biomass or water using wind, solar, or geothermal energy sources. These grants are limited to 25% of a proposed project's cost, and a loan guarantee may not exceed $25 million. The combined amount of a grant and loan guarantee must be at least $5,000 (with the grant portion at least $1,500) and may not exceed 75% of the project’s cost. In general, a minimum of 20% of the funds available for these incentives will be dedicated to grants of $20,000 or less. For more information on grant, loan guarantees, loan financing, and opportunities for combinations thereof, visit the USDA website. In 2014, $12.3 million in grants and $56.4 million in loans was awarded. For a complete list of 2014 projects.

c. Grants and loans are generally available to state government entities, local governments, tribal governments, land-grant colleges and universities**, rural electric cooperatives and public power entities, and other entities, as determined by the USDA. To be eligible for REAP grants and loans, an applicant must have a satisfactory revenue stream and be in control the budget, operations, and maintenance of a project for the entire duration of the loan or grant. Rural small businesses must be located in rural areas, but agricultural producers may be located in non-rural areas. Eligible project costs include purchasing energy efficiency improvements or a renewable energy system, energy audits or assessments, permitting and licensing fees, and business plans and retrofitting. For new construction the replacement of older

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equipment with more efficient equipment may be eligible as a project cost only when a new facility is planned to be more efficient and similarly sized than the older facility. Working capital and land acquisition are only eligible for loan guarantees. Regional rural energy coordinators provide loan and grant applications upon request.

d. The Food, Conservation, and Energy Act of 2008 (H.R. 2419), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program,* into the Rural Energy for America Program (REAP). Similar to its predecessor, the REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the new program in the following amounts: $55 million for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, up to $25 million in discretionary funding may be issued each year. The American Taxpayer Relief Act of 2012 (H.R. 8) extended discretionary funding for FY 2013. The 2014 Farm Bill reauthorized the USDA to offer these programs and removed the mandate to offer grants for feasibility studies.

e. * The Renewable Energy Systems and Energy Efficiency Improvements Program was created by the USDA pursuant to Section 9006 of the 2002 federal Farm Security and Rural Investment Act of 2002. Funding in the amount of $23 million per year was appropriated for each fiscal year from FY 2003-2007. In March 2008, the USDA announced that it would accept $220.9 million in applications for grants, loan guarantees, and loan/grant combination packages under the Renewable Energy Systems and Energy Efficiency Improvements Program. The application deadline was June 16, 2008.

f. **Land grant colleges and universities are referred to above as "schools" and "institutions". It is important to note that K-12 schools are not eligible for this grant.

8. USDA- Rural Energy for America Program (Loan Guarantees) a. Note: The U.S. Department of Agriculture's Rural Development issues

periodic Notices of Solicitation of Applications for the Rural Energy for America Program (REAP) in the Federal Registry. The most recent solicitation for the REAP program was on May 5th, 2014 and can be viewed in the Federal Registry here. The next Notice of Funding Availability will be published in the Federal Registry and on the USDA website here. Notably, the

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2014 Farm Bill removed authority for the USDA to fund REAP feasibility studies with REAP grants.

b. The Rural Energy for America Program (REAP) provides financial assistance to agricultural producers and rural small businesses in rural America to purchase, install, and construct renewable energy systems, make energy efficiency improvements to non-residential buildings and facilities, use renewable technologies that reduce energy consumption, and participate in energy audits and renewable energy development assistance. Renewable energy projects for the Renewable Energy Systems and Energy Efficiency Improvement Guaranteed Loan and Grant Program include wind, solar, biomass and geothermal, and hydrogen derived from biomass or water using wind, solar, or geothermal energy sources. These grants are limited to 25% of a proposed project's cost, and a loan guarantee may not exceed $25 million. The combined amount of a grant and loan guarantee must be at least $5,000 (with the grant portion at least $1,500) and may not exceed 75% of the project’s cost. In general, a minimum of 20% of the funds available for these incentives will be dedicated to grants of $20,000 or less. For more information on grant, loan guarantees, loan financing, and opportunities for combinations thereof, visit the USDA website. In 2014, $12.3 million in grants and $56.4 million in loans was awarded. For a complete list of 2014 projects, click here.

c. Grants and loans are generally available to state government entities, local governments, tribal governments, land-grant colleges and universities**, rural electric cooperatives and public power entities, and other entities, as determined by the USDA. To be eligible for REAP grants and loans, an applicant must have a satisfactory revenue stream and be in control the budget, operations, and maintenance of a project for the entire duration of the loan or grant. Rural small businesses must be located in rural areas, but agricultural producers may be located in non-rural areas. Eligible project costs include purchasing energy efficiency improvements or a renewable energy system, energy audits or assessments, permitting and licensing fees, and business plans and retrofitting. For new construction the replacement of older equipment with more efficient equipment may be eligible as a project cost only when a new facility is planned to be more efficient and similarly sized than the older facility. Working capital and land acquisition are only eligible for loan guarantees. Regional rural energy coordinators provide loan and grant applications upon request.

d. The Food, Conservation, and Energy Act of 2008 (H.R. 2419), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program,* into the Rural Energy for America Program (REAP). Similar to its predecessor, the REAP promotes

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energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the new program in the following amounts: $55 million for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, up to $25 million in discretionary funding may be issued each year. The American Taxpayer Relief Act of 2012 (H.R. 8) extended discretionary funding for FY 2013. The 2014 Farm Bill reauthorized the USDA to offer these programs and removed the mandate to offer grants for feasibility studies.

e. * The Renewable Energy Systems and Energy Efficiency Improvements Program was created by the USDA pursuant to Section 9006 of the 2002 federal Farm Security and Rural Investment Act of 2002. Funding in the amount of $23 million per year was appropriated for each fiscal year from FY 2003-2007. In March 2008, the USDA announced that it would accept $220.9 million in applications for grants, loan guarantees, and loan/grant combination packages under the Renewable Energy Systems and Energy Efficiency Improvements Program. The application deadline was June 16, 2008.

f. **Land grant colleges and universities are referred to above as "schools" and "institutions". It is important to note that K-12 schools are not eligible for this grant.

9. USDA- Repowering Assistance Biorefinery Program a. The Repowering Assistance Program provides payments to eligible

biorefineries to replace fossil fuels used to produce heat or power to operate the biorefineries with renewable biomass. Reimbursement payments are provided to offset a portion of the costs associated with the conversion of existing fossil fuel systems to renewable biomass fuel systems. The reimbursement amounts vary and are determined by the availability of funds, the project scope, and the ability of the proposed project to meet all the scoring criteria. In particular reimbursement amounts are calculated by the percentage reduction in fossil fuel used by the biorefinery, the quantity of fossil fuels replaced by a renewable biomass system, and the cost effectiveness of the renewable biomass system. The program will provide reimbursement payments for eligible project costs of the renewable biomass system during the construction phase of the repowering project. Up to 90% of the funds can be utilized during project construction, with the remaining 10% made upon demonstration of successful completion of the project. A

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maximum of 50% of the total project costs can be reimbursed, as long as amount does not exceed the maximum award for the fiscal year. Eligible technologies may include, but are not limited to, anaerobic digesters, processed steam, biomass boilers, or combined heat and power technologies (CHP). Applicants must demonstrate, at the time of application, that the proposed site has direct access to biomass or third party commitments to supply biomass for the repowering project for at least three years. Payments are made for eligible post-application costs incurred during the construction phase of the repowering project. Congress allocated $35 million for FY 2009, in addition to up to $15 million in discretionary funds annually beginning in FY 2009. The American Taxpayer Relief Act of 2012 extended discretionary funding through FY 2013.

10. Modified Accelerated Cost- Recovery System a. Note: Sec. 125 of H.R. 5771, the Tax Increase Prevention Act of 2014,

extended the "placed in service" date of the 50% bonus depreciation provision originally included in the American Recovery and Reinvestment Act of 2009 to December 31, 2014, and thus retroactively through the 2014 tax year.

b. Under the federal Modified Accelerated Cost-Recovery System (MACRS), businesses may recover investments in certain property through depreciation deductions. The MACRS establishes a set of class lives for various types of property, ranging from three to 50 years, over which the property may be depreciated. A number of renewable energy technologies are classified as five-year property (26 USC § 168(e)(3)(B)(vi)) under the MACRS, which refers to 26 USC § 48(a)(3)(A), often known as the energy investment tax credit or ITC to define eligible property. Such property currently includes*:

i. a variety of solar-electric and solar-thermal technologies ii. fuel cells and microturbines

iii. geothermal electric iv. direct-use geothermal and geothermal heat pumps v. small wind (100 kW or less)

vi. combined heat and power (CHP) vii. the provision which defines ITC technologies as eligible also adds the

general term "wind" as an eligible technology, extending the five-year schedule to large wind facilities as well.

c. In addition, for certain other types of renewable energy property, such as biomass or marine and hydrokinetic property, the MACRS property class life is seven years. Eligible biomass property generally includes assets used in the conversion of biomass to heat or to a solid, liquid or gaseous fuel, and to equipment and structures used to receive, handle, collect and process biomass in a waterwall, combustion system, or refuse-derived fuel system to create hot

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water, gas, steam and electricity. Marine and hydrokinetic property includes facilities that utilize waves, tides, currents, free-flowing water, or differentials in ocean temperature to generate energy. It does not include traditional hydropower that uses dams, diversionary structures, or impoundments. The 5-year schedule for most types of solar, geothermal, and wind property has been in place since 1986. The federal Energy Policy Act of 2005 (EPAct 2005) classified fuel cells, microturbines and solar hybrid lighting technologies as five-year property as well by adding them to § 48(a)(3)(A). This section was further expanded in October 2008 by the addition of geothermal heat pumps, combined heat and power, and small wind under The Energy Improvement and Extension Act of 2008.

d. The federal Economic Stimulus Act of 2008, enacted in February 2008, included a 50% first-year bonus depreciation (26 USC § 168(k)) provision for eligible renewable-energy systems acquired and placed in service in 2008. The allowance for bonus depreciation has since been extended and modified several times since the original enactment, most recently in December 2014 by the Tax Increase Prevention Act Of 2014 (H.R. 5771, Sec. 125). This legislation extended the "in-service" provision for qualifying property through to December 31, 2014, and thus also did so retroactively for property placed in service after December 31, 2013, through to enactment.

e. The 50% first-year bonus depreciation provision enacted in 2008 was extended (retroactively for the entire 2009 tax year) under the same terms by the American Recovery and Reinvestment Act of 2009 (H.R. 1), enacted in February 2009. It was renewed again in September 2010 (retroactively for the entire 2010 tax year) by the Small Business Jobs Act of 2010 (H.R. 5297). In December 2010 the provision for bonus depreciation was amended and extended yet again by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (H.R. 4853). Under these amendments, eligible property placed in service after September 8, 2010 and before January 1, 2012 was permitted to qualify for 100% first-year bonus depreciation. The December 2010 amendments also permitted bonus depreciation to be claimed for property placed in service during 2012, but reverted the allowable amount from 100% to 50% of the eligible basis. The 50% first-year bonus depreciation allowance was further extended for property placed in service during 2013 by the American Taxpayer Relief Act of 2012 (H.R. 8, Sec. 331) in January 2013. As noted above, the Tax Increase Prevention Act Of 2014 (H.R. 5771, Sec. 125), extended these provisions through to December 31, 2014, and thus retroactively for the 2014 tax year.

f. *Note that the definitions of eligible technologies included in this entry are somewhat simplified versions of those contained in tax code, which often

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contain additional caveats, restrictions, and modifications. Those interested in this incentive should review the relevant sections of the code in detail prior to making business decisions.

11. Energy- Efficient Commercial Buildings Tax Deduction a. Note: This tax deduction expired at the end of 2013. The Tax Increase

Prevention Act of 2014 retroactively reinstated the tax credit for projects completed in 2014.

b. The federal Energy Policy Act of 2005 established a tax deduction for energy-efficient commercial buildings applicable to qualifying systems and buildings placed in service from January 1, 2006, through December 31, 2007. This deduction was subsequently extended through 2008, and then again through 2013 by Section 303 of the federal Energy Improvement and Extension Act of 2008 (H.R. 1424, Division B), enacted in October 2008. A tax deduction of $1.80 per square foot is available to owners of new or existing buildings who install (1) interior lighting; (2) building envelope, or (3) heating, cooling, ventilation, or hot water systems that reduce the building’s total energy and power cost by 50% or more in comparison to a building meeting minimum requirements set by ASHRAE Standard 90.1-2001. Energy savings must be calculated using qualified computer software approved by the IRS. Click here for the list of approved software. Deductions of $0.60 per square foot are available to owners of buildings in which individual lighting, building envelope, or heating and cooling systems meet target levels that would reasonably contribute to an overall building savings of 50% if additional systems were installed. The deductions are available primarily to building owners, although tenants may be eligible if they make construction expenditures. In the case of energy efficient systems installed on or in government property, tax deductions will be awarded to the person primarily responsible for the system's design. Deductions are taken in the year when construction is completed. The IRS released interim guidance (IRS Notice 2006-52) in June 2006 to establish a process to allow taxpayers to obtain a certification that the property satisfies the energy efficiency requirements contained in the statute. IRS Notice 2008-40 was issued in March of 2008 to further clarify the rules. NREL published a report (NREL/TP-550-40228) in February 2007, which provides guidelines for the modeling and inspection of energy savings required by the statute.

12. USDA- High Energy Cost Grant Program a. NOTE: The most recent solicitation for this program closed August 1, 2014.

Please check the program website for information on future solicitations. b. The U.S. Department of Agriculture (USDA) offers an ongoing grant program

for the improvement of energy generation, transmission, and distribution

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facilities in rural communities. This program began in 2000. Eligibility is limited to projects in communities that have average home energy costs at least 275% above the national average. Individuals, non-profits, commercial entities, state and local governments (including any agency or instrumentality thereof), and tribal governments are eligible for this grant. Individuals must work on a project that will benefit the community in order to qualify. Under the most recent solicitation for projects, a total of $7 million was available for qualifying projects. Under this solicitation grants ranging from $50,000 to $3 million were available for a variety of activities, including:

i. Electric generation, transmission, and distribution facilities; ii. Natural gas or petroleum storage or distribution facilities;

iii. Renewable energy facilities used for on-grid or off-grid electric power generation, water or space heating, or process heating and power;

iv. Backup up or emergency power generation or energy storage equipment; and

v. Weatherization of residential and community property, or other energy efficiency or conservation programs.

c. This grant program is not limited to renewable energy or energy conservation and efficiency measures, but these measures are eligible for this grant program.

13. Sales and Use Credit for Emerging Clean Energy Industry a. Tenn. Code Ann. Section 67-6-346 allows a taxpayer to take a credit, to apply

for a refund of taxes paid, or to apply for authority to make tax-exempt purchases of machinery and equipment used to produce electricity in a certified green energy production facility. A certified green energy production facility is a facility certified by the Department of Environment and Conservation as producing electricity for use and consumption off the premises using clean energy technology. Clean energy technology is technology used to generate electricity from geothermal, hydrogen, solar, or wind sources. A contractor who is installing pollution control or green energy machinery and equipment must file an application with the department and must attach a copy of the contract to its application. The taxpayer who hires a contractor must also file an application with the department. If both applications are approved, authority to purchase tax exempt will be extended to the contractor for the certified green energy production facility project described in the application. If taxes have been paid, the approved application will be used to support a refund or credit directly to the taxpayer.

14. Green Energy Tax Credit a. Tennessee provides tax credits to industries in the green energy supply chain

that invest more than $250 million into the state. The Department of Revenue,

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Department of Economic and Community Development as well as the Department of Environment and Conservation are authorized to certify “green energy supply chain manufacturers” as eligible for the Green Energy Tax Credit. The $1.5 million maximum credit is applied to a company's Franchise and Excise Tax liability. In addition to the Green Energy Tax Credit, the Carbon Tax Credit is available. This is the only carbon tax credit in the United States and it provides "certified green energy supply chain manufacturers" with financial protection against any potential price that may be placed on carbon emissions by future legislation. To learn more about these credits, which can be applied against the sum total of the taxes imposed by the Franchise Tax Law compiled in this part and the Excise Tax Law, see this guide.

15. TVA- Mid-Sized Renewable Standard Offer Program a. The Tennessee Valley Authority (TVA) now compliments the small

generation Green Power Providers Program by providing incentives for mid-sized renewable energy generators between 50kW and 20MW to enter into long term price contracts. The goal for total production from all participants is 100MW, with no more than 50MW from any one renewable technology. The Renewable Standard Offer program also includes Solar Solution Initiative program that offers additional financial incentives for Solar Photovoltaic (PV) projects. TVA bases the standard offer for customer generators off of a seasonal time-of-day averages chart, which sets base prices for the term of the contract. For projects approved after January 2015, prices increase at a rate of 5% per year beginning in 2016 and may be changed with 90 days’ notice by TVA (no more than 1% per year). For 2015, the average price is expected range between $0.029/kWh during low demand periods to $0.051/kWh during high demand periods. Learn more about pricing here. Generation is recorded monthly through metering equipment installed by TVA and paid for by the participant. All energy output, Renewable Energy Credits (RECs), or other environmental attributes from installations under this program belong to TVA, and all marketing of the program should indicate that TVA (not the power seller) consumes all of the energy from these renewable energy projects. Biomass, Wind, or Photovoltaics can be interconnected through either TVA's transmission system or partners' distribution systems under 10, 15, or 20 year contracts. Biomass should co-fire 50% or more with the fuel consumption content approved by TVA and separately metered. The remainder of the biomass production can be purchased through the TVA's Dispersed Power Production Program. Before approval, the seller must provide TVA with project financing arrangements, interconnection agreements between the seller and either TVA or a Distributor, and TVA

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metering installation plans at an environmentally acceptable location. The participating power producer is responsible for interconnection, performance assurance, and application costs. TVA, or an approved third party, will also perform an environmental review at the seller’s cost.

16. TVA- Solar Solutions Initiative a. Solar Solutions Initiative (SSI) is a pilot program that offers additional

financial incentives for Solar PV systems participating in the Renewable Standard Offer program. Applications for new projects for the year 2015 will open on January 2, 2015. Participants applying for the Solar Solutions Incentive program are required to apply through the Renewable Standard Offer program. The program offers performance-based incentive of $0.04/kWh for the first 10 years after the project is operational. This incentive is additional to the seasonal and time-of-day price for electricity offered through the Renewable Standard Offer program. The total capacity for the program for the year 2015 is capped at 20 MW with set aside of 12 MW for traditional SSI participants, 4 MW for projects between 50kW- 200kW and 4MW for local power company participants. Aside from the 2015 capacity of 20MW, the program has offered total cumulative capacity of 36MW since its inception in 2012.

17. TVA- Green Power Providers a. Note: Enrollment for 2015 was conducted from January 26th to February

13th. b. Tennessee Valley Authority (TVA) and participating power distributors of

TVA power offer a performance-based incentive program to homeowners and businesses for the installation of renewable generation systems from the following qualifying resources: PV, wind, hydropower, and biomass. The long term Green Power Providers program replaces the Generation Partners* pilot program. The energy generated from these renewable generation systems will count towards TVA's green power pricing program, Green Power Switch. The Green Power Providers program contract term is 20 years. For years 1-10, TVA will purchase 100% of the output from qualifying systems at a premium of $0.02** per kilowatt-hour (kWh) on top of the retail electricity rate. Participants will be paid only the applicable retail rate for years 11-20 of the contract. TVA will review premium payments annually, with plans to phase these payments out over the life of the program. All new participants in the Generation Power Providers program will receive a $1,000 incentive to offset the upfront cost. Participation in the Generation Power Providers program is subject to annual limits imposed by TVA and based upon available budget, the value of renewable technologies to TVA and renewable energy market conditions. Eligible Systems must not have previously generated renewable

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energy for sale to TVA prior to October 1, 2012, unless the system was part of the Generation Partners pilot. TVA will retain all rights to all renewable energy credits and any other environmental attributes provided by system. Either the Distributor Billing Option or the TVA-Vendor Direct Billing Option makes payment. With the Distributor Billing Option, the local power company on the monthly power bills for the home or business where the generation system is located issues a generation credit. If a qualifying system produces more electricity than the customer consumes, payment for any excess credits will be issued either monthly or annually, at the discretion of the power company. With the TVA-Vendor Direct Billing Option, participants receive the retail-rate portion of their monthly generation credit from the local power company and the premium rate is issued through a TVA-designated third party vendor. Qualifying systems will have a minimum total nameplate generation capacity (DC) of 500 watts (W) and a maximum of 50 kilowatts (kW). Systems over 50kW may qualify to participate in TVA’s Mid-Sized Renewable Standard Offer program (link to DSIRE summary). Systems greater than 10 kilowatts in size will be subject to a load requirement. A “load requirement” simply means that the system’s maximum capacity will be limited so that it should not generate more than 100% of the energy usage or consumption at the home or business. TVA will conduct annual program evaluations to set annual MW limits to the program. These limits will be made available on the Generation Power Providers web site. Limits of 11.33 MW limit including 4 MW of residential capacity and 7.33 MW of non-residential capacity is available for the program. Installations must comply with local codes and adhere to guidelines established by the program. All equipment must be in compliance with environmental regulations and national standards, certified by a licensed electrician, and meet all applicable codes. Systems must be dual-metered, have an external disconnect switch, be grid-tied, and be validated under an interconnection agreement.

c. * Existing Generation Partners participants may qualify for a 10-year contract extension to be paid at retail prices.

d. **Prices reflect Premium Rates for 2015 Calendar Year and are applicable for agreements executed and dated by TVA on or after January 1, 2015 but on or prior to December 31, 2015. Premium amounts are annually published in the Green Power Provider Guidelines.

18. TVA- Energy Right Solutions for Business a. TVA offers the Energy Right Solutions Program to commercial and industrial

facilities. In addition to prescriptive rebates for lighting, motors, HVAC, and kitchen equipment, administrators take a custom baseline of pre-installation demand and compare to post installation measurements to determine the

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financial incentive amount in kilowatt-hour values. The incentives program is offered along with complimentary energy assessments and reviews to determine potential areas for savings. Customers can work with designers and installers to develop a project plan and complete a participation application form. Participants should receive a pre-installation incentive notification letter before removing any existing equipment.