Green Irene Guide to the Stimulus Packages

Overview

The Green Irene Guide to the Stimulus Packages provides you with information about federal incentives that can help businesses go green. The Stimulus Packages, officially known as the Economic Recovery Act of 2008 and the American Recovery and Reinvestment Act of 2009, were signed by Presidents George Bush and Barack Obama to address the economic recession. We want our clients to capitalize on these incentives as much as possible. If there ever was a time for homes and small businesses to go green, this is the time. The federal government will help our clients go green much more easily and cost-effectively. Make sure you take advantage of this opportunity!

Below are the provisions of the Stimulus Packages by category that are applicable to small businesses. For more information about incentives that apply to homes, click here.

Energy Efficiency Deployment ($2 billion over ten years)

*      Tax credits (not deductions) for energy efficient business improvements (same as for homes) are extended through 2010 and increased from 10% to 30% of qualified expenses paid for efficiency upgrades (up to $1,500). Efficiency upgrades include:

- Energy-Star central air conditioners and heat pumps;
- Energy-Star furnaces and boilers;
- Energy-Star windows, doors, and roofing;
- Code-appropriate insulation and sealing;
- Energy-Star ground-source heat pumps; and
- Solar water heaters and biogas or biomass stoves.

Public Transportation, Alternative Fuels and Efficient Vehicles ($2.3 billion over ten years)

*      Business and individual tax credits for alternative fuel pumps and refueling infrastructure is temporarily increased from 30% to 50% of qualifying costs for 2009 and 2010, with the exception of hydrogen fueling pumps, which remain capped at 30%.
*      Increases tax credit for purchase of plug-in hybrid electric vehicles, allowing larger credits for vehicles with larger batteries. The base amount of the credit is $2,500. If the qualified vehicle draws propulsion from a battery with at least 5 kilowatt hours of capacity, the credit is increased by $417, plus another $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours up to 16 kilowatt hours. The amount can go up to $3,500 for non-plug-ins and to $7,500 for plug-ins.
*      Parity is provided between the employer tax credit for fringe benefits for transit and parking offered to employees. Previously the credit for transit benefits was lower than for parking benefits. The bill sets maximum credit for fringe parking and transit benefits at $230 per month. Expected cost is $192 million over ten years.

Clean Energy Deployment ($2.5 billion over ten years)

*      Provides a full 30% credit for small wind and solar generators aside from the home improvement provision. This is in addition to state and local tax credits.
*      Authorizes $1.6 billion for Clean Renewable Energy Bonds (CREBs Bonds) to help finance the construction of new renewable energy facilities owned/operated by non-profit entities, including public power providers, state/municipal/tribal governments, and electric cooperatives.

What do I need to do to get the tax credit?

You will need to file IRS Form 5695 with your taxes. In addition, you will need to keep at least receipts proving that you purchased the improvements and a copy of the manufacturer’s certification (or the ENERGY STAR label for windows). Accountants and tax advisors should also be able to provide more guidance.

To learn more, please visit the following resources:

Alliance to Save Energy: http://www.ase.org/content/article/detail/2654

Database of State Incentives for Renewables & Efficiency: http://www.dsireusa.org/

Department of Energy: http://www.energy.gov/recovery/index.htm

Energy Efficiency and Renewable Energy: http://www.eere.energy.gov/

Energy Star: http://www.energystar.gov

NJ Clean Energy Program (Energy Efficiency and Renewable Energy): http://www.njcleanenergy.com/

Pennsylvania Keystone Home Energy Loan Program: http://www.keystonehelp.com/

PSE&G Solar Loan Program: http://www.pseg.com/customer/solar/index.jsp?WT.mc_id=solarloan

Tax Incentives Assistance Project (Includes IRS Forms): http://www.energytaxincentives.org/

Weatherization Assistance Program: http://apps1.eere.energy.gov/weatherization/