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In addition to tax incentives, the Federal government offers several grant or incentive programs to support wind power.
Clean Renewable Energy Bonds
In 2006 the U.S. Treasury, through the Internal Revenue Service (IRS), conducted a competitive process for the allocation of $800 million (face value) of Clean Renewable Energy Bonds (CREBs). Modeled after the Qualified Zone Academy Bonds, CREBs offer the issuer the equivalent of zero-interest financing. The federal government provides a tax credit to bond holders in lieu of interest payments. In the first round, the IRS received 786 applications from 40 states, totaling $2.5 billion in requested funds (compared to $800 million allocated). Six hundred and ten projects were approved. Of those, 532 were for state, regional, and local government-sponsored renewable energy projects (with individual awards ranging from $23 thousand to $3.2 million) and 78 were for cooperative-sponsored projects (with individual awards ranging from ($120 thousand to $31 million). Wind received 112 awards in total, including 99 government projects and 13 cooperative projects. Examples of entities receiving CREBs allocations for proposed New England wind projects include: the Narragansett Bay Commission and the Town of Portsmouth in Rhode Island, and the New Hampshire Electric Cooperative. Along with these awards, the IRS announced an additional $400 million in CREBs financing authority; applications were due July 13, 2007. Qualifying CREBs applications are awarded funds from smallest to largest dollar request until the IRS's funding allocation is exhausted. Due to the large number of requests in 2007, applicants participating in the 2008 round are encouraged to use CREBs as a supplement in their financing, as opposed to a 100% — or even majority — of project debt.
More Information
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The Renewable Energy Production Incentive (REPI) is a cash production incentive intended to provide similar incentives to renewable projects as provided by the Production Tax Credit (PTC) to public power and other tax-exempt entities unable to take advantage of the PTC. As part of the Energy Policy Act of 2005, REPI was reauthorized through 2026. To be eligible, qualified renewable energy facilities must be on-line before October 1, 2016. EPAct 2005 also expands eligibility to include Indian tribes. Funding is subject to annual appropriation. In years where there is a shortfall in funding, the 2005 EPAct allocates 60% of REPI funds to solar, wind, ocean, geothermal, or closed-loop biomass technologies and the remainder to landfill gas, livestock methane, and open-loop biomass. All projects are eligible to receive incentives for electricity generated during a ten-year period beginning from commercial operation.
Under Section 9006 of the 2002 Farm Bill, the U.S. Department of Agriculture makes direct loans, loan guarantees, and grants to agricultural producers and rural small businesses to purchase renewable energy systems and make energy-efficiency improvements. For more information, please see the U.S. Department of Agriculture Farm Bill Web site.
DOE's Office of Energy Efficiency and Renewable Energy's Tribal Energy Program provides financial and technical assistance to tribes for feasibility studies and shares the cost of implementing sustainable renewable energy installations on tribal lands. For more information, please see the Tribal Energy Program Web site.
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