Enhanced Energy Tax Credits Support Clean Energy Projects

October 24, 2008

New legislation expanding business energy tax credits for energy efficiency and renewable projects can make it more cost-effective for U.S. industrial companies to implement combined heat and power and geothermal technologies. The Energy Improvement and Extension Act of 2008, included in the recently enacted Emergency Economic Stabilization Act, significantly enhances tax incentives for renewable and energy efficiency technologies.

The law established a new 10% investment tax credit for combined heat and power systems and geothermal heat pumps. It also extends the duration of the existing tax credits for solar energy, fuel cells, and microturbines by 8 years, and increases the credit amount for fuel cells. In addition, it extends eligibility for the credits to utilities, and allows taxpayers to take the credit against the alternative minimum tax, subject to certain limitations. Learn more about the business energy tax credits.  

The new law also extends the tax deduction by 5 years for energy efficient building systems of heating, ventilating and air conditioning, interior lighting, and hot water improvements. See details on the energy efficient commercial buildings tax deduction.

The bill also authorizes $800 million of Qualified Energy Conservation Bonds to finance state and local government initiatives designed to reduce greenhouse emissions. The bonds can be applied to a wide range of energy efficiency, research and demonstration, and renewable energy projects.  

Read a summary (PDF 28 KB) of the new and expanded incentives. Download Adobe Reader

DOE's Industrial Technologies Program (ITP) leads national efforts to reduce U.S. industrial energy use and carbon emissions. A key component of this effort is to provide financial opportunities for research, development, and deployment, and promote commercialization of innovative, energy-saving technologies.

The Energy Matters article, “Financial Opportunities Help Advance New Technologies,” provides more information about financial resources offered by ITP, and other entities.