Federal Incentives & Grants

1.8¢/kWh for Advanced Turbines, Fuel Cells, Hybrids, or Energy Storage
Under the Energy Policy Act of 2005 (Section 1224) owners or operators of advanced power system technologies are eligible for a payment of 1.8 cents per kWh of electricity generation. Qualifying facilities must use an advanced turbine, fuel cell, or hybrid power system or a power storage system to generate or store electricity. Facilities are eligible up to the first 10 million kWh produced in a fiscal year. An additional 0.7 cents per kWh is available for owners or operators of qualifying security and assured power facilities as deemed appropriate by DOE and Department of Homeland Security. Expires December 31, 2012.

Energy Efficient Commercial & Public Buildings Tax Deduction
Commercial and public buildings that install energy efficient technologies including CHP are eligible for a tax deduction of $0.30-$1.80 per square foot. For details see the Commercial Buildings Tax Deduction Coalition.

Business Tax Credit for Fuel Cells or Microturbines
As part of the Energy Policy Act (section 1336), businesses that install fuel cells can receive a 30% tax credit, up to a maximum of $500 per 0.5 kW. Businesses that install microturbines can receive a 10% tax credit, up to a maximum or $200 per kW, and a total maximum microturbine system capacity of 2 MW. Expires December 31, 2007. [See details]

Renewable Electricity Production Tax Credit (for Corporations)
CHP technologies that use biomass, landfill gas, or municipal solid waste are eligible for 0.9¢/kWh, adjusted for inflation, for 5 years of operation (Closed-loops biomass, i.e. crops grown specifically for energy) get 1.9¢/kWh. Expires December 31, 2007. [See details]

Renewable Energy Production Incentive (for Governments, Municipal Utilities, & Rural Co-ops)
State and local governments, tribal governments, municipal utilities, and rural cooperatives can receive a tax credit of $1.8¢/kWh (adjusted for inflation) for CHP technologies fueled by biomass, livestock methane, or landfill gas, for 10 years of operation. [See details]

USDA Renewable Energy Systems and Energy Efficiency Improvements - Grants & Loans (Farm Bill)
Agricultural projects or commercial projects in rural areas can get grants of up to 25% of project costs, with a maximum of $500,000, or loans of up to 50% of project costs with a maximum of $10 million. Natural gas-fired CHP systems may qualify as an energy efficiency measure, and obviously biomass or other renewable-fueled CHP systems will certainly qualify as a renewable energy system. [See details]

Inventions and Innovations Program
The Inventions and Innovations Program offers grants to individuals and small businesses for the investigation of innovative ideas and inventions with commercial market potential that could save a significant amount of energy. Once or twice a year, the program releases an "announcement of funding opportunity." [See details]

20% Credit for Gasification Projects
Under the Energy Policy Act of 2005, the Project Credit provides a 20% credit per year for any eligible property used for a qualifying gasification project. A project will be eligible if it employs gasification technology for at least 90% of the fuel required for the production of chemical feedstocks, liquid transportation fuels, or co-production of electricity related to chemicals, fertilizers, glass, steel, petroleum residues, forest products, or agriculture. Gasification technology is defined under this section as any process which converts a solid or liquid product from coal, petroleum residue, biomass, or other materials which are recovered for their energy or feedstock value into a synthesis gas composed primarily of carbon monoxide and hydrogen for direct use or subsequent chemical or physical conversion. The credit recipient must demonstrate that the project is feasible without additional federal funding. 350 million is available for this project between 2006-2011. Expires December 31, 2007.

StEPP Foundation
The StEPP Foundation, a 501(c)(3) nonprofit organization, has funding available for energy efficiency, renewable energy, and pollution prevention projects implemented for the benefit of the public. For more information, go to www.steppfoundation.org.

Grants for Projects in Economically-Distressed Areas
The Economic Development Administration's (EDA's) Public Works Program helps communities in economic decline revitalize, expand, and upgrade their facilities. Projects that have been funded in the past include: water and sewer facilities upgrades; technology-related infrastructure development; diversification of natural resource dependent economies efforts; commercialization and deployment of innovative technologies; business/industrial development; and the demolition, renovation, and construction of publicly owned facilities. The following types of applicants are eligible for funding: economic development districts; states, cities, or other political subdivisions of a state or consortium of political subdivisions; Indian tribes; colleges and universities; public or private nonprofit organizations; and associations acting in cooperation with officials of a political subdivision of a state. Projects must either be located in or directly benefit an area that exhibits economic distress, determined based on the level of unemployment, per capita income, or special need. EDA provides direct grants, on a cost-share basis, generally funding 50 percent of the project cost. [See details]