The American Recovery and Reinvestment Act of 2009 allows taxpayers eligible for the federal renewable electricity production tax credit (PTC)* to take the federal business energy investment tax credit (ITC) instead of taking the PTC for new installations. The eligible technologies listed above reflect this allowance in that they include PTC-eligible technologies/resources such as landfill gas and wave power that are now eligible for the ITC. In January 2013 the American Taxpayer Relief Act of 2013 (H.R. 8) revised the language governing the ability of PTC-eligible facilities to claim the ITC to allow projects that begin construction by the end of 2013 to qualify for the ITC. Prior to H.R. 8, the law required PTC-eligible facilities to be placed in service by the end of 2013 (or 2012 in the case of wind) in order qualify for the ITC. Please see the DSIRE PTC summary for further information regarding eligibility.
The federal business energy investment tax credit available under 26 USC § 48 was expanded significantly by the Energy Improvement and Extension Act of 2008 (H.R. 1424), enacted in October 2008. This law extended the duration — by eight years — of the existing credits for solar energy, fuel cells and microturbines; increased the credit amount for fuel cells; established new credits for small wind-energy systems, geothermal heat pumps, and combined heat and power (CHP) systems; allowed utilities to use the credits; and allowed taxpayers to take the credit against the alternative minimum tax (AMT), subject to certain limitations. The credit was further expanded by the American Recovery and Reinvestment Act of 2009, enacted in February 2009. For solar electric,the credit is equal to 30% of expenditures, with no maximum credit. Source
Under the federal Modified Accelerated Cost-Recovery System (MACRS), businesses may recover investments in certain property through depreciation deductions. The MACRS establishes a set of class lives for various types of property, ranging from three to 50 years, over which the property may be depreciated. A number of renewable energy technologies are classified as five-year property (26 USC § 168(e)(3)(B)(vi)) under the MACRS, which refers to 26 USC § 48(a)(3)(A), often known as the energy investment tax credit or ITC to define eligible property.
The federal Economic Stimulus Act of 2008, enacted in February 2008, included a 50% first-year bonus depreciation (26 USC § 168(k)) provision for eligible renewable-energy systems acquired and placed in service in 2008. The allowance for bonus depreciation has since been extended and modified several times since the original enactment, most recently in January 2013 by the American Taxpayer Relief Act of 2012 (H.R. 8, Sec. 331). This legislation extended the placed in service deadline for 50% first-year bonus depreciation by one year, from December 31, 2012 to December 31, 2013. Source
Iowa offers a 15% corporate tax credit for solar energy systems. The credit is based on the federal tax credits for solar; a taxpayer may claim 50% of the value of the Federal Business Tax Credit. The federal tax credit is 30%, making the Iowa credit 15%. Each taxpayer may claim up to $3,000 for residential systems and $15,000 for commercial systems under this program, and any excess credits may be carried over for up to 10 years. The cumulative value of the tax credits claimed by applicants under this program and the personal tax credit is limited to $1,500,000 per year. Because of this limit, a taxpayer must complete an application to reserve the tax credit. Credits will be reserved on a first-come, first-serve basis. Source
The Jefferson County Energy Rewards Loan Program was created to facilitate renewable energy and energy efficiency projects in Fairfield, Iowa and the surrounding area. Homes and businesses in Jefferson County are eligible for this low-interest loan program. Application guidelines and participating financial institutions can be found on the Fairfield Go Green website, here.