TN Renewable Energy Incentives
Oct. 14th, 2009 06:36 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
tnrkitectIt has been a while since I last looked at the incentives to use renewable energy (solar, wind, biomass, geothermal, etc) in Tennessee. A LOT has changed, and for the better!
(Other states incentive programs may be better or worse, see DSIRE - Database of State Incentives for Renewables & Efficiency for your locale)
The last time I looked, there were no incentives at the state level for any sort of renewable energy production, with the only incentives being offered in the state coming from the federal government either directly, in the form of the federal tax credit, or indirectly, through the TVA Generations Partners program.
Well, last night my wife and I were guest attendees for the monthly meeting of the East Tennessee Chapter of CSI, the Construction Specifications Institute.
The featured topic was Knoxville's Solar America City Initiative. We had Erin Burns, the Sustainability Coordinator for the City and Gil Melear-Hough, with the Southern Alliance for Clean Energy as presenters.
The two gave a condensed presentation of the "Solar for Your Business” workshop they had put together for the Knoxville Chamber of Commerce members, in order to have time for a Q & A session afterwards. The full powerpoint presentation from that workshop is available as a PDF download from here: http://www.cityofknoxville.org/policy/solar/bizworkshop.asp Just click on the link in the grey sidebar to download. (also of note was this graphic of the solar generating capacity of the US compared to that of Germany, which leads the world in Solar Generation Capacity. For those naysayers that opine that solar won't work in this or any other part of the US except the desert, look at the graphic and explain to me how it works in Germany but not in "x" part of the US)
The main item that I took away from it all was that times have CHANGED.
There are now incentives in place that will pay anywhere from 70% to 95% of the cost of installing renewable energy for your business in Tennessee. Yes, you read that right. Ninety. Five. Percent.
How? It is simple.
Nota Bene: the incentives are heavily tilted towards Photovoltaic systems.
You take advantage of the 30% Federal Tax Credit. for PV, there is no cap.
You take advantage of the 40% TN Clean Energy Technology Grant. there is a $75,000 cap.
You take advantage of the 25% USDA Energy Grant. this is limited to agricultural and rural small businesses. Note: I need to do some more research to verify that this can be taken in conjunction with the Federal Tax Credit. There is a potential that it is an either / or situation. I will update this evening.
Add it up. 30% + 40% + 25% = 95%
But wait! There's More!
As an added bonus, you can take advantage of federal Modified Accelerated Cost Recovery System to fully depreciate your solar system in 5 years.
Plus, TVA's Generation Partners Program pays you a 12 cent per kilowatt-hour premium for every bit of energy you produce. This means that if you currently pay 10 cents per kWh for electricity, they will buy what you produce for 22 cents per kWh.
AND TVA gives a $1,000 start up incentive to help defray your start up costs.
As a case study, a 12.24 kW PV system which generates 14,688 kWh per year would run around $105,000 installed. (8.5 cents / watt)
The TN-CET Grant would knock 40% off of that, or $42,000.
The Federal Tax Credit (a true credit, not a deduction) knocks another 30% off, or $31,500.
The USDA grant knocks an additional 25% off, or $26,250.
This leaves an installed cost of $5,250.*
From that $5,250, you will deduct the $3,000 average payment from the TVA GPP, meaning the system will have paid for itself in under TWO YEARS.
This does not take into account the accelerated depreciation, which if is assessed on the $105,000 (I am not a Tax expert, so check with your tax adviser for the actual limitations) would mean the first year you could write off an additional $21,000 in depreciation, which would actually mean the system earns you money the FIRST YEAR. If you happened to take out a loan to finance the installation, the depreciation savings would cover the interest charges with room to spare.
* Yes, you DO have to pay the entire $105,000 up front, however the savings all kick in during the first year.
Now, it is true that most businesses in Tennessee will not qualify for the USDA Energy Grant, as they are not agricultural or rural small businesses.
All this means is that instead of earning you money in the first year, the system takes 5 years to pay for itself. Considering the guarantee on a quality PV solar system is typically 25 years, and the TVA GPP program will pay the premium for a minimum of 10 years, it still makes financial sense.
So, now that I have convinced you that you need to do this, what does it take to get the ball rolling for your business?
First, you need to know that in order to qualify for the tax credits and incentives, the system needs to be installed by a NABCEP - North American Board of Certified Energy Practitioners certified installer.
Second, you will need to get your system designed for you. This should include assessment of the site (shading issues, orientation, etc.), building electrical system, building structural system (for roof mounted systems) and the production of a design that will provide a turn-key system for you.
This design should be sufficient to obtain bids from installers, allowing you to get the best value for your money.
Some installers are capable of doing the entire design and installation for you, but you have no guarantees that they are giving you the best overall price.
Now, here is where I need to put in a plug for the company I work for, Michael Brady, Inc. as we offer not only Electrical Engineering and design, but also Structural, Civil, and Mechanical Engineering and design. Oh yeah, we also can provide Architectural, Interior Design, and Surveying services too. We can provide all of the assessment and design services for your project, and help you navigate through the bidding and construction process as well.
So in closing, now that you know what solar can do for your business's bottom line in Tennessee, what's stopping you from going ahead and installing it, and reaping the money and PR rewards?
(Other states incentive programs may be better or worse, see DSIRE - Database of State Incentives for Renewables & Efficiency for your locale)
The last time I looked, there were no incentives at the state level for any sort of renewable energy production, with the only incentives being offered in the state coming from the federal government either directly, in the form of the federal tax credit, or indirectly, through the TVA Generations Partners program.
Well, last night my wife and I were guest attendees for the monthly meeting of the East Tennessee Chapter of CSI, the Construction Specifications Institute.
The featured topic was Knoxville's Solar America City Initiative. We had Erin Burns, the Sustainability Coordinator for the City and Gil Melear-Hough, with the Southern Alliance for Clean Energy as presenters.
The two gave a condensed presentation of the "Solar for Your Business” workshop they had put together for the Knoxville Chamber of Commerce members, in order to have time for a Q & A session afterwards. The full powerpoint presentation from that workshop is available as a PDF download from here: http://www.cityofknoxville.org/policy/solar/bizworkshop.asp Just click on the link in the grey sidebar to download. (also of note was this graphic of the solar generating capacity of the US compared to that of Germany, which leads the world in Solar Generation Capacity. For those naysayers that opine that solar won't work in this or any other part of the US except the desert, look at the graphic and explain to me how it works in Germany but not in "x" part of the US)
The main item that I took away from it all was that times have CHANGED.
There are now incentives in place that will pay anywhere from 70% to 95% of the cost of installing renewable energy for your business in Tennessee. Yes, you read that right. Ninety. Five. Percent.
How? It is simple.
Nota Bene: the incentives are heavily tilted towards Photovoltaic systems.
You take advantage of the 30% Federal Tax Credit. for PV, there is no cap.
You take advantage of the 40% TN Clean Energy Technology Grant. there is a $75,000 cap.
You take advantage of the 25% USDA Energy Grant. this is limited to agricultural and rural small businesses. Note: I need to do some more research to verify that this can be taken in conjunction with the Federal Tax Credit. There is a potential that it is an either / or situation. I will update this evening.
Add it up. 30% + 40% + 25% = 95%
But wait! There's More!
As an added bonus, you can take advantage of federal Modified Accelerated Cost Recovery System to fully depreciate your solar system in 5 years.
Plus, TVA's Generation Partners Program pays you a 12 cent per kilowatt-hour premium for every bit of energy you produce. This means that if you currently pay 10 cents per kWh for electricity, they will buy what you produce for 22 cents per kWh.
AND TVA gives a $1,000 start up incentive to help defray your start up costs.
As a case study, a 12.24 kW PV system which generates 14,688 kWh per year would run around $105,000 installed. (8.5 cents / watt)
The TN-CET Grant would knock 40% off of that, or $42,000.
The Federal Tax Credit (a true credit, not a deduction) knocks another 30% off, or $31,500.
The USDA grant knocks an additional 25% off, or $26,250.
This leaves an installed cost of $5,250.*
From that $5,250, you will deduct the $3,000 average payment from the TVA GPP, meaning the system will have paid for itself in under TWO YEARS.
This does not take into account the accelerated depreciation, which if is assessed on the $105,000 (I am not a Tax expert, so check with your tax adviser for the actual limitations) would mean the first year you could write off an additional $21,000 in depreciation, which would actually mean the system earns you money the FIRST YEAR. If you happened to take out a loan to finance the installation, the depreciation savings would cover the interest charges with room to spare.
* Yes, you DO have to pay the entire $105,000 up front, however the savings all kick in during the first year.
Now, it is true that most businesses in Tennessee will not qualify for the USDA Energy Grant, as they are not agricultural or rural small businesses.
All this means is that instead of earning you money in the first year, the system takes 5 years to pay for itself. Considering the guarantee on a quality PV solar system is typically 25 years, and the TVA GPP program will pay the premium for a minimum of 10 years, it still makes financial sense.
So, now that I have convinced you that you need to do this, what does it take to get the ball rolling for your business?
First, you need to know that in order to qualify for the tax credits and incentives, the system needs to be installed by a NABCEP - North American Board of Certified Energy Practitioners certified installer.
Second, you will need to get your system designed for you. This should include assessment of the site (shading issues, orientation, etc.), building electrical system, building structural system (for roof mounted systems) and the production of a design that will provide a turn-key system for you.
This design should be sufficient to obtain bids from installers, allowing you to get the best value for your money.
Some installers are capable of doing the entire design and installation for you, but you have no guarantees that they are giving you the best overall price.
Now, here is where I need to put in a plug for the company I work for, Michael Brady, Inc. as we offer not only Electrical Engineering and design, but also Structural, Civil, and Mechanical Engineering and design. Oh yeah, we also can provide Architectural, Interior Design, and Surveying services too. We can provide all of the assessment and design services for your project, and help you navigate through the bidding and construction process as well.
So in closing, now that you know what solar can do for your business's bottom line in Tennessee, what's stopping you from going ahead and installing it, and reaping the money and PR rewards?
