Tax Benefits for Going Green in the 2009 Stimulus Package

Any government sponsored or based financial package would not be complete without significant measures to stimulate the use of renewable energy sources and activities.  The incentives to do so show the commitment by government to move the nation toward energy independence and renewability.  Public sentiment on this issue drives this to the forefront of importance in terms of priorities.  The 2009 Stimulus Package provides about $50 billion targeted at bringing in a clean-energy future.

Wind Facilities.  In the stimulus package, two large government entities won huge amounts of borrowing authority for capital to aid in the generation of wind power.  These two organizations are the Oregon-based Bonneville Power Administration and the Colorado-based Western Area Power Administration.  Together these two giants netted $6.5 billion dollars of the stimulus pool.  This borrowing authority refers to the ability to borrow directly from the U.S. Treasury.  The technology and advances in wind power generation will be applied to other areas of the nation as well.

Home energy.  You will find a tax credit of 30% for the cost of a new solar energy system which is placed in a home.  This is on top of any state or local financing that is in place as well.  Also, you will find $5 million to fund weatherization of homes as a way to create jobs and place money in consumers’ pockets.  Annual savings could net $350 for families who take advantage of this tax break.  New insulation, windows and furnaces are given a boost in federally backed and public housing projects with $6.3 billion.

Energy bonds.  In order to spur investment, there is an authorization of an additional $1.6 billion in new clean, renewable energy bonds.  Also, included is $2.4 billion of energy conservation bonds to finance state and local government projects that seek to reduce greenhouse gas emissions.

Electric vehicles.  Plug-in vehicles are eligible for a tax credit of at least $2,500.  This credit increases based upon the capacity of the batteries contained in the automobile that is purchased.  The tax credit has a ceiling of $7,500.

Renewable energy facilities.  There is a new 30% investment tax credit for producing renewable energy by facilities in engaged in technology and conservation.  Also there is spending of $11 billion to upgrade the national transmission grid to transmit renewable energy from rural areas to large cities and digitize the electrical grid to prevent outages.

All of these incentives together make for an aggressive front for long-term energy independence.  And, the fact is that this is just scratching the surface of what can and should be done in this area.  With each new discovery and placement of alternative energy developments, the nation moves away from importation of expensive and earth-polluting fossil fuels.  A worthy move by any standard.