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Kentucky

Kentucky

Incentives/Policies for Renewables & Efficiency

Printable Version
Tax Exemption for Large-Scale Renewable Energy Projects   

Last DSIRE Review: 12/19/2012
Program Overview:
State: Kentucky
Incentive Type: Sales Tax Incentive
Eligible Renewable/Other Technologies: Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Similar Renewable Resources
Applicable Sectors: Commercial
Amount:Up to 100% of sales and use tax
Maximum Incentive:For all state tax incentives: 50% of capital investment in the eligible project
Equipment Requirements:50 kW minimum for solar power, 1 MW minimum for wind power, biomass, landfill gas, hydropower or similar resource
Minimum Capital Investment for a renewable energy facility: $1,000,000
Start Date:1/1/2008
Web Site: http://www.thinkkentucky.com/kyedc/kybizince.aspx
Authority 1:
KRS § 139.517
Authority 2:
Date Enacted:
Date Effective:
KRS § 154.27-010 et seq.
8/30/2007
1/1/2008
Authority 3:
103 KAR 31:190
Summary:

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 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.

In addition the tax credit for renewable energy facilities 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. 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.


 
Contact:
  Don Goodin
Kentucky Cabinet for Economic Development
Department of Financial Incentives
Old Capitol Annex
300 West Broadway
Frankfort, KY 40601
Phone: (502) 564-4554 Ext.3413
E-Mail: Don.Goodin@ky.gov
Web Site: http://www.thinkkentucky.com/
 
  Ricky Haven
Kentucky Department of Revenue
Sales and Use Tax Office of Sales and Excise Taxes
501 High Street
Frankfort, KY 40620
Phone: (502) 564-6828
Fax: (502) 564-2041
E-Mail: ricky.haven@ky.gov
Web Site: http://revenue.ky.gov/
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2013 - 2014 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.