Oregon
Incentives/Policies for Renewable Energy
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Last DSIRE Review: 11/10/2009
| Incentive Type: |
Corporate Tax Credit |
| State: |
Oregon |
| Eligible Efficiency Technologies: |
Lighting,
Heat recovery,
Caulking/Weather-stripping,
Duct/Air sealing,
Building Insulation,
Comprehensive Measures/Whole Building
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| Eligible Renewable/Other Technologies: |
Passive Solar Space Heat,
Solar Water Heat,
Solar Space Heat,
Solar Thermal Electric,
Photovoltaics,
Landfill Gas,
Wind,
Biomass,
Hydroelectric,
Renewable Transportation Fuels,
Geothermal Electric,
Geothermal Heat Pumps,
CHP/Cogeneration,
Hydrogen,
Industrial Waste,
Refueling Stations,
Ethanol,
Methanol,
Biodiesel,
Fuel Cells using Renewable Fuels
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| Applicable Sectors: |
Commercial,
Industrial,
Builder/Developer,
Multi-Family Residential,
Agricultural,
Equipment manufacturers
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| Amount: | Renewable energy generation, renewable energy equipment manufacturing, high efficiency combined heat and power: 50% of eligible project costs, distributed over five years (10% per year)
All other projects: 35% of eligible project costs, distributed over five years (10% in the first and second years, 5% each year thereafter) |
| Maximum Incentive: | $20 million for renewable energy equipment manufacturing facilities
$10 million for other projects |
| Carryover Provisions: | Excess credit may be carried forward eight years; those with eligible project costs of $20,000 or less may take credit in one year. |
| Eligible System Size: | Not specified |
| Equipment/Installation Requirements: | System must be new and in compliance with all applicable performance and safety standards; must pass preliminary and final certification of the ODOE review process. |
| Project Review/Certification: | "Sustainable Buildings" must achieve LEED Silver Certification in addition to other ODOE requirements. |
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Web Site: |
http://egov.oregon.gov/ENERGY/CONS/BUS/BETC.shtml
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Authority 1:
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Temporary Oregon Administrative Rules
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| Date Effective: | 11/3/2009 |
| Expiration Date: | 5/1/2010 |
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Authority 2:
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OAR 330-090-0105 to 330-090-0150
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| Date Enacted: | 1/1/1980 |
| Date Effective: | 6/20/2008 |
| Expiration Date: | 11/3/2009 |
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Summary:
NOTE: In November 2009, the Oregon Department of Energy adopted temporary administrative rules (effective from November 3, 2009, to May 1, 2010) that more stringently define criteria for separate and distinct facilities for the purpose of applying for multiple credits. The new rules also allow the Oregon Department of Energy to revoke certificates and recapture the tax credit if a project does not produce the amount of energy, jobs, or conservation described in the application. The old administrative rules are still listed above for reference, though the new rules have temporarily replaced the old rules. Any projects that have not been pre-certified by November 3, 2009 are subject to the new rules.
Oregon's Business Energy Tax Credit (BETC) is for investments in energy conservation, recycling, renewable energy resources, sustainable buildings, and less-polluting transportation fuels. Any Oregon business may qualify, including, but not limited to, manufacturing plants, stores, offices, apartment buildings, farms, and transportation. The tax credit can cover costs directly related to the project, including equipment cost, engineering and design fees, materials, supplies and installation costs. Loan fees and permit costs also may be claimed. However, replacing equipment at the end of its useful life or equipment required to meet codes or other government regulations are not eligible. Maintenance costs are also not eligible. All projects must meet the BETC technical requirements to qualify.
HB 3201, enacted in July 2007, increased the tax credit to 50% of the total cost for renewable energy, high efficiency combined heat and power, and renewable energy equipment manufacturing facilities, with a maximum credit of $10 million. The tax credit for all other projects remains at 35% of eligible project costs. The 50% tax credit is taken over five years -- 10% each year. Any unused credit may be carried forward up to eight years. Those with eligible project costs of $20,000 or less may take the tax credit in one year. These changes are retroactive to include projects beginning on or after January 1, 2007; and the sunset date is January 1, 2016.
In March 2008, HB 3619 increased the maximum credit just for manufacturers of renewable energy equipment to $20 million (50% of a $40 million facility). HB 3619 also requires the Oregon Department of Energy (ODOE) to set standards related to what constitutes a manufacturing facility, as well as the facility’s minimum level of increased employment, financial viability, and the influence that the BETC would have on a manufacturer locating in Oregon. ODOE can apply those standards to certify a lesser amount of costs than applied for, including zero costs. HB 3619 also requires ODOE to consider criteria relating to the state’s general fund before determining the amount of costs eligible for the BETC.
The tax credit is also available to homebuilders who install renewable energy systems on the homes they construct, The maximum tax credit for a homebuilder is $9,000 per single-family home, or $12,000 if the system is installed on a certified high-performance home. To be considered a high-performance home, the dwelling must be certified through the Northwest Energy Star Homes Program, and meet additional requirements outlined in the technical requirements.
Under the pass-through option, a project owner may transfer a tax credit to a pass-through partner in return for a lump-sum cash payment (the net present value of the tax credit) upon completion of the project. The pass-through option allows non-profit organizations, schools, governmental agencies, tribes, and other public entities and businesses without tax liability to use the Business Energy Tax Credit by transferring their tax credit for an eligible project to a partner with a tax liability.
Projects that use solar, wind, hydro, geothermal, biomass or fuel cells (renewable fuels only) to produce energy, displace energy, or reclaim energy from waste may qualify for a tax credit. Renewable resource projects must replace at least 10% of the electricity, gas or oil used. The energy can be used on site or sold.
General retrofit projects, in addition to those for lighting, and weatherization projects for rental property may be eligible for the program, as well as new construction projects, including energy efficiency and lighting. Retrofit projects must be 10% more energy efficient than the existing installation; lighting retrofits must be 25% more efficient than existing lighting. For new buildings, all measures must reduce energy use by at least 10% compared to a similar building that meets the minimum requirements of the state energy code.
Cogeneration projects may also be eligible. Projects that develop new markets for recycled materials or recycle materials not required by law may be eligible for the tax credit. Projects that reduce employee commuting (or work-related travel) and investments in cleaner-burning fuels may qualify.
In 2001, the Oregon Legislature added sustainable buildings to the list of measures and systems eligible for the tax credit. This addition became effective October 8, 2001 and is retroactive to January 1, 2001. In addition to several requirements set forth by the ODOE, the building must meet established standards set by the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) for Silver Certification.
Applications and instructions are available on the program web site. Through 2007, more than 14,000 energy tax credits have been awarded to Oregon businesses. Altogether, those investments save or generate energy worth about $215 million a year.
The ODOE has published a brochure to explain how the tax credit works.
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