One good deed usually leads to another. When it comes to government supporting renewable energy, the practice appears to be catching on. This spring, two states and the federal government announced major investments designed to encourage development of alternative energy sources.
Oregon Gov. Ted Kulongoski set the stage when he approved a bill that allows tax credits of up to $40 million for manufacturers of renewable energy equipment. The bill, which is designed to draw new and expanded businesses to the state, implements changes to the Oregon’s Business Energy Tax Credit program, including an increase in tax incentives for commercial solar energy systems from roughly 35 to 50 percent. Combined with Energy Trust of Oregon incentives and federal incentives, the increase allows most businesses to recoup the initial investment in a solar system within five years.
Not to be outdone, South Dakota Gov. Mike Rounds signed legislation that will encourage new manufacturing facilities in his state by providing tax incentives for wind energy facilities and the transmission lines that serve them. House Bill 1320 waives all state and local property taxes for wind energy facilities with a capacity of at least 5 megawatts. Instead, the owners have to pay a tax of $3 per kilowatt of capacity plus 2 percent of the gross receipts of the wind facility. The wind facility developers also can earn rebates for up to half the cost of underground distribution lines, substations and transmission lines built to support the wind power facility. The rebates can equal 90 percent of the taxes paid for the first five years and 50 percent of the taxes paid for the following five years. The remaining tax proceeds will be divided among the state, county and local governments where the wind facility is located.
The federal government also is in on the act. The U.S. Department of Energy (DOE) recently announced that it will invest up to $13.7 million over three years for 11 university-led projects that will focus on developing advanced solar photovoltaic technology manufacturing processes and products. Combined with a minimum university and industry cost share of 20 percent, up to $17.4 million will be invested in these projects. Projects were selected for funding after receiving responses to a funding opportunity announcement issued by the DOE last summer. They include projects involving Arizona State University, California Institute of Technology, Georgia Institute of Technology, Massachusetts Institute of Technology, North Carolina State University, Pennsylvania State University, University of Delaware Institute of Energy Conversion, University of Delaware, University of Florida and two projects from the University of Toledo. All of the selected university-led projects involve partnerships with private solar power industry manufacturers.