Vermont

Incentives/Policies for Renewable Energy

Business Tax Credit for Solar (Corporate)

Last DSIRE Review: 06/08/2010

Program Overview:

State:	Vermont
Incentive Type:	Corporate Tax Credit
Eligible Renewable/Other Technologies:	Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics, Solar Hybrid Lighting
Applicable Sectors:	Commercial, Industrial
Amount:	30% for property commissioned before 09/01/2011 for C-corporations (that file a Vermont corporate return).
Maximum Incentive:	No maximum specified.
Carryover Provisions:	5-years
Program Start Date:	01/01/2009
Program Expiration Date:	12/31/2011

Authority 1: 32 V.S.A. § 5930z Date Enacted: 03/19/2008 (subsequently amended) Date Effective: 07/01/2008 Expiration Date 12/31/2010
Authority 2: H.B. 781 Date Enacted: 06/04/2010 Date Effective: 06/04/2010

Summary:

Vermont offers the "Business Solar Tax Credit" for installations of solar energy equipment on business properties. The credit was created in March 2008 by S.B. 209, and amended several times since.* The credit is equal to 100% of the "Vermont-property portion" of the federal business energy tax credit for solar from 2008 through 2011. In effect, this constitutes a 30% state-level credit for systems and equipment that use solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. Hybrid solar lighting systems are those that use solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight. The credit is generally not available for public utility property, passive solar systems or pool heating equipment. Any unused tax credit may be carried forward for no more than five years.

For projects starting January 1, 2010 or later, businesses will have to seek tax credit eligibility pre-approval from the Clean Energy Development Board. Only solar energy facilities 2.2 MW or less are eligible. For systems that do not require a certificate of public good (such as solar thermal projects or net metered projects up to 150 kilowatts), businesses have until December 15, 2010 to apply to the board to certify eligibility and they have until December 31, 2010 to make the investment. For systems that do require a certificate of public good, businesses have to apply for that certificate to the public service board by July 15, 2010 and apply to the Clean Energy Development Board to certify tax credit eligibility by July 15, 2010. Construction for these projects must be complete by September 1, 2011.

Any taxpayer who receives funding from Vermont's Clean Energy Development Fund is not eligible to claim the tax credit for the project (for investments made on or after January 1, 2009). Corporate taxpayers who take the Federal Treasury grant in lieu of tax credit are not eligible for Vermont's Business Solar Tax Credit.

The Vermont Department of Taxes issued Technical Bulletin 45 (July 2009) with additional guidance, including information about which forms to complete for individual and corporate filers. Corporate filers should use tax for BA-404 available on Vermont Department of Taxes website. Likely, this technical guidance will be updated to conform to the amendments enacted via H.B. 781.

**H.B. 446 and H.B. 313 in May 2009 amended the tax credit, as did H.B. 781 in June 2010.

Contact:

Public Information - VT DOT
Vermont Department of Taxes
Corporate Income Tax
133 State St.
Montpelier, VT 05633
Phone: (802) 828-5723
Web Site: http://www.state.vt.us/tax

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