Country:United States
Year:2008
Policy status:Superseded
Jurisdiction:National
Date Effective:2008
Policy Type:Economic Instruments>Fiscal/financial incentives>Tax relief
Energy Efficiency Policy Targets:Transport, Fuel, Residential Appliances, Buildings, Building Type, Non-residential, Buildings, Building Type, Residential, Energy Utilities, CHP
Renewable Energy Policy Targets:Wind, Bioenergy, Biofuels for transport, Bioenergy, Biomass for heat, Bioenergy, Biomass for power, Geothermal, Heat, Geothermal, Power, Ocean, Tidal, Ocean, Wave, Solar
Policy Sector:Multi-sectoral Policy
Size of Plant Targeted:Small and Large
Climate Change Policy Targets:Transport, Buildings, Non-Residential, Buildings, Residential, Carbon Capture Storage, Energy Sector, CHP, Energy Sector, Electricity Generation, Renewable, Energy Sector, Electricity Generation, Renewable, Bioenergy, Energy Sector, Electricity Generation, Renewable, Geothermal, Energy Sector, Electricity Generation, Renewable, Hydropower, Energy Sector, Electricity Generation, Renewable, Ocean, Energy Sector, Electricity Generation, Renewable, Solar Photovoltaic, Energy Sector, Electricity Generation, Renewable, Solar Thermal, Energy Sector, Electricity Generation, Renewable, Wind
Agency:Internal Revenue Service (IRS)
URL:http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_public_laws&docid=f:publ343.110.pdf
Legal References:H.R. 1424 Division B: Energy Improvement and Extension Act 2008; Public Law No: 110-343
Energy Efficiency Description:

Signed into law in October 2008, the Emergency Economic Stabilization Act of 2008 (H.R. 1424) included the Energy Improvement and Extension Act, which extended production tax credits (PTC) and investment tax credits (ITC) for various renewable energy sources, which were due to expire at the end of 2008. It also modified existing tax incentives for energy efficiency investments, as well as creating new ones. In terms of energy efficiency, the bill extended energy efficiency tax deductions for commercial buildings through 2013 and revived similar deductions for home improvements installed in 2009, adding a new USD 300 tax credit for energy-efficient biomass fuel stoves. It also extended tax credits for builders of new energy-efficient homes through 2009 and increased tax credits for manufacturers of energy-efficient appliances, while extending that credit through 2010. The act created a new tax credit of up to USD 7,500 for plug-in hybrid vehicles, expected to go on sale in 2010, while providing tax exemptions for idle reduction technologies and advanced insulation installed in trucks. Electric charging stations will now also be covered by a 30% tax credit through to 2010. To facilitate financing, the bill authorised USD 800 million in Qualified Energy Conservation Bonds, which will be issued by state and local governments. The bonds can be applied to a wide range of energy efficiency projects, research and demonstration projects, and even renewable energy projects. The bill also extended the authority to issue bonds for qualified green building and sustainable design projects through 2012. The Act also aims for a more complete use and benefit of the tax credits. To this end it includes a provision to increase the income limits for the Alternative Minimum Tax (part of the federal income tax system which limits the types of deductions certain taxpayers can use to lower their tax). It also allows unused tax credits to be carried over to the following year.

Renewable Energy Description:

Signed into law in October 2008, the Emergency Economic Stabilization Act of 2008 (H.R. 1424) included the Energy Improvement and Extension Act, which extended production tax credits (PTC) and investment tax credits (ITC) for various renewable energy sources, which were due to expire at the end of 2008. It also modified existing tax incentives for energy efficiency investments, as well as creating new ones. In terms of renewable energy, the Act extended the PTC for wind power by one year, till the end of 2009 (in 2007 this equalled USD 2.0 cents/kilowatt hour). In addition, small wind power gained a 30% ITC, up to USD 4,000 for wind turbines with capacities of 100 kilowatts or less, through to 2016. The bill also provided a two-year PTC extension, through 2010, for electricity produced from geothermal, biomass, and solar energy facilities, as well as waste-to-energy facilities, small hydropower facilities using irrigation water, capacity additions to existing hydropower plants, and hydropower facilities added to existing dams. Solar energy gained an eight-year extension (through 2016) of the 30% ITC for residential and commercial solar installations, as well as the elimination of the USD 2,000 tax credit cap for residential solar electric installations. In addition, the bill created a new ITC for electricity produced by marine and hydrokinetic renewable energy systems (also called advanced water power systems) with a rated capacity of at least 150 kilowatts and placed in service by 2011. The tax credits for fuel cells were also extended by 8 years, and the fuel cell tax credit limit tripled, to USD 1,500 for each 0.5 kilowatts of capacity. The act also created a new 10% tax credit for certain combined heat and power systems and for geothermal heat pumps (up to USD 2,000). For biofuel producers, the act extended a 50% first-year depreciation for cellulosic biomass ethanol plants to include any plant producing biofuels from cellulosic (non-food) biomass sources. The act also extended through 2009 a PTC of USD 1 per gallon for biodiesel and other biomass-based diesel fuels, and a credit of USD 10 cents per gallon for small biodiesel producers. It also reduced the PTC for renewable diesel blended with petroleum to USD 50 cents per gallon, while closing a loophole that allowed foreign producers to earn a U.S. tax credit. The act also extended a 30% tax credit for alternative fuel refueling facilities through 2010. To facilitate financing, the bill authorised USD 800 million in new Clean Renewable Energy Bonds for all of the above technologies. It also ends a prohibition on utilities from obtaining the ITC. The Act also aims for a more complete use and benefit of the tax credits. To this end it includes a provision to increase the income limits for the Alternative Minimum Tax (part of the federal income tax system which limits the types of deductions certain taxpayers can use to lower their tax). It also allows unused tax credits to be carried over to the following year.

Climate Change Description:

Signed into law in October 2008, the Emergency Economic Stabilization Act of 2008 (H.R. 1424) included the Energy Improvement and Extension Act, which extended production tax credits (PTC) and investment tax credits (ITC) for various renewable energy sources, which were due to expire at the end of 2008. It also modified existing tax incentives for energy efficiency investments, as well as creating new ones. In terms of renewable energy, the Act extended the PTC for wind power by one year, till the end of 2009 (in 2007 this equalled USD 2.0 cents/kilowatt hour). In addition, small wind power gained a 30% ITC, up to USD 4,000 for wind turbines with capacities of 100 kilowatts or less, through to 2016. The bill also provided a two-year PTC extension, through 2010, for electricity produced from geothermal, biomass, and solar energy facilities, as well as waste-to-energy facilities, small hydropower facilities using irrigation water, capacity additions to existing hydropower plants, and hydropower facilities added to existing dams. Solar energy gained an eight-year extension (through 2016) of the 30% ITC for residential and commercial solar installations, as well as the elimination of the USD 2,000 tax credit cap for residential solar electric installations. In addition, the bill created a new ITC for electricity produced by marine and hydrokinetic renewable energy systems (also called advanced water power systems) with a rated capacity of at least 150 kilowatts and placed in service by 2011. The tax credits for fuel cells were also extended by 8 years, and the fuel cell tax credit limit tripled, to USD 1,500 for each 0.5 kilowatts of capacity. The act also created a new 10% tax credit for certain combined heat and power systems and for geothermal heat pumps (up to USD 2,000). For biofuel producers, the act extended a 50% first-year depreciation for cellulosic biomass ethanol plants to include any plant producing biofuels from cellulosic (non-food) biomass sources. The act also extended through 2009 a PTC of USD 1 per gallon for biodiesel and other biomass-based diesel fuels, and a credit of USD 10 cents per gallon for small biodiesel producers. It also reduced the PTC for renewable diesel blended with petroleum to USD 50 cents per gallon, while closing a loophole that allowed foreign producers to earn a U.S. tax credit. The act also extended a 30% tax credit for alternative fuel refueling facilities through 2010. To facilitate financing, the bill authorised USD 800 million in new Clean Renewable Energy Bonds for all of the above technologies. It also ends a prohibition on utilities from obtaining the ITC. In terms of energy efficiency, the bill extended energy efficiency tax deductions for commercial buildings through 2013 and revived similar deductions for home improvements installed in 2009, adding a new USD 300 tax credit for energy-efficient biomass fuel stoves. It also extended tax credits for builders of new energy-efficient homes through 2009 and increased tax credits for manufacturers of energy-efficient appliances, while extending that credit through 2010. The act created a new tax credit of up to USD 7,500 for plug-in hybrid vehicles, expected to go on sale in 2010, while providing tax exemptions for idle reduction technologies and advanced insulation installed in trucks. Electric charging stations will now also be covered by a 30% tax credit through to 2010. To facilitate financing, the bill authorised USD 800 million in Qualified Energy Conservation Bonds, which will be issued by state and local governments. The bonds can be applied to a wide range of energy efficiency projects, research and demonstration projects, and even renewable energy projects. The bill also extended the authority to issue bonds for qualified green building and sustainable design projects through 2012. Tax credits per ton of CO2 captured and transported were also enacted, and USD 1.5 billion in new tax credits provided for the creation of adva

This record is superseded by:American Recovery and Reinvestment Act of 2009: Tax-Based Provisions

Last modified: Tue, 09 Jun 2015 18:37:04 CEST