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Financial Incentives

The following resources provide information on grants from both public and private institutions for distributed energy projects.

  • Case Studies of Leading Clean Energy Funds — Clean Energy States Alliance, September 2002. Includes several distributed generation case studies and some international examples.

  • Database of State Incentives for Renewable Energy — Includes state-by-state financial and regulatory incentives (tax credits, grants, special utility rates, etc.) for a variety of distributed energy technologies (primarily renewable energy systems).

  • Economic Incentives for Distributed Generation — There are numerous financial incentives for distributed generation projects that utilize renewable energy, but few states offer incentives for fossil-fuel-fired distributed generation. This database describes such economic incentives in 11 states.

  • EPA project funding — Information on financial assistance available for projects or programs that can help reduce greenhouse gas emissions, including energy efficiency and renewable energy projects. Aid is available to individuals, community groups, small businesses, nonprofits, state and local government, and tribes. This EPA site lists funding available from several federal agencies (including EPA and DOE), various state agencies, and private foundations. It also provides information on additional sources of funding, information about the federal grant process, tips for writing applications, and other related topics.

  • EERE Financing Solutions and Incentives — Provides information on financing for energy efficiency and renewable energy projects.

  • The 2004 Guidebook of Funds and Incentives for Distributed Energy Resources — Xenergy Inc, May 2004. Available for a fee. Covers over 200 federal, state, and utility grant programs, renewable energy funds, tax incentives, and rebates that are available to energy service companies, developers and businesses interested in implementing distributed energy resource projects.

  • State, Utility, and Local Distributed Generation Incentives Matrix — Center for Applied Economic Research, Montana State University-Billings, June 2004. (PDF 563 KB) Download Adobe Reader.

Also note that distributed generation using some renewable energy technologies is eligible for a production tax credit of more than 1.5 cents per kilowatt-hour under section 45 of the Internal Revenue Code. The exact amount of the credit is adjusted for inflation each year. This tax credit is periodically renewed by Congress, and the list of qualifying technologies changes a little from time to time.

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