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Renewable Energy Tax Credits News Briefs - January 2013

On Nov. 9 Hawaii’s Department of Taxation announced new temporary administrative rules on the Renewable Energy Technologies Income Tax Credit, which will apply to systems installed and placed into service on or after Jan. 1, 2013. The new rules only apply to tax credits claimed under “other solar energy systems,” such as photovoltaic systems, and will limit the available solar tax credit to $5,000 for the average residential solar power system. The energy systems must also meet the applicable total output capacity requirements outlined in the temporary administrative rules, unless an exception applies. These changes essentially cut the previous 35 percent tax credit in half. Credit claims have experienced a dramatic increase in Hawaii over the past few years. In Honolulu alone, there were $35 million in claims for 2010 and $173 million in claims this year. The Department of Taxation cited a lack of clarity in the previous rules, issued in 2010, as a reason behind the rule changes. Environmentalists and renewable energy advocates such as Blue Planet Foundation and the Sierra Club have voiced disappointment with the new rules, stating that limiting the amount of renewable energy credit available to taxpayers will put solar power out of reach for many families and business owners. The groups also voiced concern that the new tax credit restrictions will hurt solar energy jobs. There were no announced changes to the rules for solar energy systems that heat water and wind energy systems. The temporary rules took effect Nov. 16, 2012 and are set to expire May 16, 2014. A copy of the rules is available at the Hawaii Department of Taxation.

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A bill has been introduced to the Pennsylvania State Senate to aid the state’s solar renewable energy credit (SREC) market, which has been in a decline because of oversupply. S.B. 1350 proposes to amend the Alternative Energy Portfolio Standards (AEPS) Act of 2004 by increasing Pennsylvania’s AEPS solar carve-out requirements starting from compliance year 2013 through 2015, then decreasing the AEPS solar-carve out requirements through 2020. The bill also proposes to change the alternative compliance payment (ACP) to $285/SREC for 2013 through 2019, then reducing the ACP by 2 percent with each subsequent reporting period. Solar thermal facilities will qualify for the energy credit under the bill also. Read the bill at the Pennsylvania State Senate.

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The American Council on Renewable Energy (ACORE) released a report on the status of renewable energy implementation at the state level. It includes information on stalled and planned capacity, markets, economic development, resource potential and policy for each state. Also included in each state’s profile are summaries of grant programs, loan programs and tax incentives offered. For example, Massachusetts offers personal tax credits for systems installed on a primary residence, property tax exemptions for wind and solar, renewable energy sales tax exemptions, excise tax incentives, renewable energy patent or associated royalty income tax deductions and cellulosic biofuel tax exemptions. Vermont offers a 24 percent investment tax credit incentive for the Vermont property portion of federal business energy tax credits, a 100 percent property tax exemption for solar photovoltaic systems up to 10 kilowatt (kW), sales tax exemption for purchase of renewables up to 250 kW. High-tech businesses in Vermont that design, develop and manufacture clean energy vehicles can qualify for three of the following: payroll income tax credit, qualified research and development tax credit, export tax credit, small business tax credit or high-tech growth tax credit. Access the report at acore.org.

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Chadbourne & Park LLP announced the election of new partners to the firm. Clara Krivoy’s industry experiences encompass energy, financial services, telecommunications and more. She received her law degree from Universidad Católica Andrés Bello and her M.C.J. and LL.M. from New York University School of Law. John J. Marciano III advises on areas such as renewable power installations and utility-scale power plants. He earned his B.A. from Canisius College, his J.D. from the University of Pittsburgh School of Law and his tax LL.M. from Georgetown University Law Center. Keith M. Rosen rejoined the firm after serving as chief of the criminal division at the U.S. Attorney’s Office in Wilmington, Del. His clients include those involved in the energy and consumer products sectors. Rosen earned his A.B. from Brown University and his J.D. from Yale Law School.

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Renewable Energy Tax Credits

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