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All of Nebraska can take advantage of the 26%
Federal Tax Credit
, which will allow you to recoup 26% of
your equipment AND installation costs for an unlimited amount.

There may still be other local rebates from your city, county, or utility. Check below!

Nebraska Solar PV Rebates & Incentives

Data from DSIRE. Last updated: 03/28/2024

NameAdministratorBudgetLast UpdatedEnd DateDSIRE ID
Summary
Dollar and Energy Savings LoansNebraska Energy Office08/07/2003/28/24214

The Nebraska Dollar and Energy Savings Loan program was created in 1990 using oil overcharge funds. The program, administered by the Nebraska Energy Office, makes available low-interest loans for residential and commercial energy efficiency improvements and renewable energy projects. 

Renewable energy projects may be eligible for a loan under one of two circumstances. First, a project may be eligible if it is included in a list of prequalified improvements. This list includes a variety of renewable energy projects, including wind, photovoltaics, solar hot water heating, and fuel cells. Second, projects not listed as prequalified improvements may be eligible with the submission of an energy audit that verifies that the project will have a reasonable payback period (varies by improvement type).

Process

The program works by leveraging of State Energy Office funds through collaboration with individual Nebraska banks, savings institutions, and credit unions. An individual seeking a loan under this program first approaches his or her financial institution, which approves the project on financial terms. The financial institution then gains approval from the Energy Office, who can purchase 50%, 65%, or 75% of the loan at 0% to deliver a low interest rate to the borrower.

Terms and Conditions

Under the program the simple interest rates are 5%, 3.5%, or less for the borrower, depending on the project. Prequalified projects are financed with a low-interest loan for up to 15 years for home and building improvements, 5 years for appliances, and 3 to 10 years for other prequalified projects.

Most loan applications are reviewed and processed within 10 working days. All qualifying work should be completed within 5 months of Energy Office's commitment of funds to invest in lender's fund.

Business Energy Investment Tax Credit (ITC)U.S. Internal Revenue Service08/29/2303/28/24658

Note: The Inflation Reduction Act of 2022 (H.R. 5376) made several significant changes to this tax credit, including expanding the eligible technologies, extending the expiration date, modifying the scheduled step-down in its value, providing for new bonus credits, and establishing new criteria to qualify for the full credit. It also phases out this tax credit under section 48 of the Internal Revenue Code and replaces it with a new technology-neutral tax credit under section 48E of the Internal Revenue Code. The summary below describes the current section 48 tax credit as modified by the Inflation Reduction Act, and below that, the new 48E tax credit.   

The federal Business Energy Investment Tax Credit (ITC) has been amended a number of times, most recently and most significantly by the Inflation Reduction Act of 2022. That bill established new prevailing wage and apprenticeship requirements for larger system to qualify for the full 30% tax credit. The Department of the Treasury issued Initial Guidance on these requirements on November 30, 2022 . According to law, the labor provisions apply to projects for which construction begins 60 days or more after Treasury publishes its guidance. Given the publishing date of November 30, 2022, the effective date for the labor provisions is January 30, 2023. The credit for different project types and available bonus credits is described below.


Base Credit

Projects under 1 MW (or larger projects that are commenced no more than 60 days after the Treasury Secretary develops labor guidelines) do not need to meet the new labor standards established by the Inflation Reduction to receive the full 30% tax credit. Such projects that begin construction after 2021 and before 2025 can receive the full tax credit of 30%. Note, projects that commence construction on or after January 1, 2025 can receive a tax credits under the new Clean Electricity Investment Tax Credit (48E) described below. 

Projects over 1 MW that begin construction 60 days after the Treasury Secretary releases labor guidelines (January 29, 2023) and no later than January 1, 2025 will receive a base tax credit of 6%. However, projects can qualify for the full 30% tax credit if they ensure that all laborers and mechanics involved in the construction of the project or the maintenance of the project for 5 years after project completion are paid wages at rates not less than prevailing wages. Projects must also ensure that a percentage of total labor hours are performed by qualified apprentices. The percent of hours increases over time to a maximum requirement of 15% in 2024 and thereafter. Note, projects that commence construction on or after January 1, 2025 can receive a tax credits under the new Clean Electricity Investment Tax Credit (48E) described below. 

Bonus Credits

Projects in which 100% of any steel or iron that is a component of the facility and 40% of the manufactured products that are components of the facility were produced in the United States can qualify for the Domestic Content Bonus. For projects that are under 1 MW and projects that are larger than 1 MW and meet the labor requirements specified above, the Domestic Content Bonus increases the tax credit by 10 percentage points. For larger projects that do not meet the labor requirements, the Domestic Content Bonus increases the tax credit by 2 percentage points. Note, the 40% requirement for manufactured products increases over time, eventually requiring 55% domestic content for projects commenced after 2026, The IRS issued Notice 2023-38 in May 2023, which provides further guidance on the domestic content bonus.     

Projects that are located within an energy community can receive the Energy Community Bonus. To qualify, a facility must be located at one of the following: (i) a brownfield site, (ii) a metropolitan or non-metropolitan statistical area which (A) has (or, at any time during the period beginning after December 31, 2009, had) 0.17% or greater direct employment or 25% or greater local tax revenues related to the extraction, processing, transport, or storage of coal, oil, or natural gas, or (B) has an unemployment rate above the national average for the previous year, or (iii) a census tract or a census tract that is adjoining a census tract in which a coal mine has closed after 1999 or a coal-fired electric generating unit was retired after 2009. For projects that are under 1 MW and projects that are larger than 1 MW and meet the labor requirements specified above, the Energy Community Bonus increases the tax credit by 10 percentage points. For larger projects that do not meet the labor requirements, the Energy Community Bonus increases the tax credit by 2 percentage points. 

The Treasury Department issued Notice 2023- 29 in April 2023, which provides initial guidance on the Energy Community Bonus Credit. The Treasury Department later updated and clarified its guidance in June 2023 with Notice 2023-45. The Treasury Department also issued Notice 2023-47 in June 2023, which includes lists of information that taxpayers may use to determine whether they meet certain requirements under the Statistical Area Category or the Coal Closure Category. The Department of Energy has also released a GIS map showing the locations of qualifying energy communities.  

Solar and wind facilities less than 5 MW may also be eligible for low-income bonuses. A project built in a low-income community as defined by the New Markets Tax Credit or on Indian Land can receive an increased tax credit of 10 percentage points. The Department of Energy has also released a GIS map showing qualifying low-income communities. A project associated with a low-income residential building project or a low-income economic benefit project can receive an increased tax credit of 20 percentage points. These bonuses are capped at 1.6 GW of projects per year.  The IRS issued Notice 2023-17 in February 2023, to allocate the cap across different categories of projects. The IRS also issued final regulations in August to provide further guidance on the iow-income communities bonus credit. Additional information can be found on the U.S. Department of Energy's webpage dedicated to the ow-income communities bonus credit.

Eligible Technologies

  • Solar Technologies
  • Fuel Cells
  • Wind Turbines 
  • Geothermal Systems
  • Microturbines
  • Combined Heat and Power (CHP)
  • Offshore Wind
  • Waste Energy Recovery. Qualified waste energy recovery property means property that generates electricity solely from heat from buildings or equipment if the primary purpose of such building or equipment is not the generation of electricity. The term “waste energy recovery property” does not include any property that has a capacity in excess of 50 megawatts.
  • Energy Storage Systems, both paired with generation and installed as a stand-alone system
  • Thermal Energy Storage Systems
  • Qualified Biogas Property
  • Microgrid Controllers
  • Interconnection Property associated with the installation of energy property with a maximum net output of not greater than 5 MW-AC to provide for the transmission or distribution of the electricity produced or stored by such property, and which are properly chargeable to the capital account of the taxpayer.

Credit Monetization

Section 13801 of The Inflation Reduction Act of 2022 also established procedures for other parties to monetize certain tax credits, including this one, for equipment placed in service on or after January 1, 2023 and through December 31, 2032. 

The direct pay option allows non-taxable entities to directly monetize certain tax credits. The provisions apply to nonprofits, a state or political subdivision thereof, the Tennessee Valley Authority, Indian tribal governments (as defined in Section 30D(g)(9)), any Alaska Native Corporation (as defined in Section 3 of the Alaska Native Claims Settlement Act), or any corporation operating on a cooperative basis which is engaged in furnishing electric energy to persons in rural areas. Such applicable entities can elect to be treated as having made a tax payment equal to the value of the tax credit they would otherwise be eligible to claim. The entity can then claim a refund for the excess taxes they are deemed to have paid. The option effectively makes this tax credit refundable for these entities. 

The act also allows eligible taxpayers to transfer all or a portion of their eligible tax credits to an unrelated taxpayer. Transfers must be reported to IRS and only one transfer is permitted. Must be elected no later than the due date for tax filing for the tax year the tax credit is claimed.

Clean Electricity Investment Tax Credit (48E)

Section 13702 of the Inflation Reduction Act created a new tax credit, the Clean Electricity Investment Tax Credit to replace the traditional ITC for systems placed in service on or after January 1, 2025. The tax credit is functionally similar to the ITC, but is not technology-specific. It applies to all generation facilities and energy storage systems that have an anticipated greenhouse gas emissions rate of zero. The credit amount is generally calculated in the same manner as described above, but will be phased out as the U.S. meets greenhouse gas emission reduction targets. For a project whose construction is commenced in the year following the year in which greenhouse gas emissions from the production of electricity in the United States are equal to or less than 25% of the 2022 levels, the tax credit will not be reduced. However, for projects commenced in the second year following the target being met, the tax credit will be worth 75% of what it would otherwise be. Projects commenced in the third year will receive a credit worth 50%, and all projects commenced after then will not be eligible for a tax credit. 


Residential Energy Conservation Subsidy Exclusion (Personal)U.S. Internal Revenue Service07/20/2203/28/24666

According to Section 136 of the U.S. Code, energy conservation subsidies provided (directly or indirectly) to customers by public utilities* are non-taxable. This exclusion does not apply to electricity-generating systems registered as "qualifying facilities" under the Public Utility Regulatory Policies Act of 1978 (PURPA). If a taxpayer claims federal tax credits or deductions for the energy conservation property, the investment basis for the purpose of claiming the deduction or tax credit must be reduced by the value of the energy conservation subsidy (i.e., a taxpayer may not claim a tax credit for an expense that the taxpayer ultimately did not pay).

The term "energy conservation measure" includes installations or modifications primarily designed to reduce consumption of electricity or natural gas, or to improve the management of energy demand. Eligible dwelling units include houses, apartments, condominiums, mobile homes, boats and similar properties. If a building or structure contains both dwelling units and other units, any subsidy must be properly allocated.

The definition of "energy conservation measure" implies that utility rebates for residential solar-thermal projects and photovoltaic (PV) systems may be non-taxable. However, the IRS has not ruled definitively on this issue. Taxpayers considering using this provision for a renewable energy system should discuss the details of the project with a tax professional. Other types of utility subsidies that may come in the form of credits or reduced rates might also be non-taxable, according to IRS Publication 525.


* The term "public utility" is defined as an entity "engaged in the sale of electricity or natural gas to residential, commercial, or industrial customers for use by such customers." The term includes federal, state and local government entities.

Modified Accelerated Cost-Recovery System (MACRS)U.S. Internal Revenue Service07/12/2303/28/24676

Note: The Tax Cuts and Jobs Act of 2017 increased bonus depreciation to 100% for qualified property acquired and placed in service after September 27, 2017 and before January 1, 2023. Bonus depreciation steps down by 20% each year beginning with 80% in 2023..  

Under the federal Modified Accelerated Cost-Recovery System (MACRS), businesses may recover investments in certain property through depreciation deductions. The MACRS establishes a set of class lives for various types of property, ranging from three to 50 years, over which the property may be depreciated. A number of renewable energy technologies are classified as five-year property (26 USC § 168(e)(3)(B)(vi)) under the MACRS, which refers to 26 USC § 48(a)(3)(A), often known as the energy investment tax credit or ITC to define eligible property. Such property currently includes*:

  • a variety of solar-electric and solar-thermal technologies
  • fuel cells and microturbines
  • geothermal electric
  • direct-use geothermal and geothermal heat pumps
  • small wind (100 kW or less)
  • combined heat and power (CHP)
  • the provision which defines ITC technologies as eligible also adds the general term "wind" as an eligible technology, extending the five-year schedule to large wind facilities as well.

In addition, for certain other types of renewable energy property, such as biomass or marine and hydrokinetic property, the MACRS property class life is seven years. Eligible biomass property generally includes assets used in the conversion of biomass to heat or to a solid, liquid or gaseous fuel, and to equipment and structures used to receive, handle, collect and process biomass in a waterwall, combustion system, or refuse-derived fuel system to create hot water, gas, steam and electricity. Marine and hydrokinetic property includes facilities that utilize waves, tides, currents, free-flowing water, or differentials in ocean temperature to generate energy. It does not include traditional hydropower that uses dams, diversionary structures, or impoundments.

The 5-year schedule for most types of solar, geothermal, and wind property has been in place since 1986. The federal Energy Policy Act of 2005 (EPAct 2005) classified fuel cells, microturbines and solar hybrid lighting technologies as five-year property as well by adding them to § 48(a)(3)(A). This section was further expanded in October 2008 by the addition of geothermal heat pumps, combined heat and power, and small wind under The Energy Improvement and Extension Act of 2008.

Bonus Depreciation

Bonus Depreciation has been sporadically available at different levels during different years. Most recently, The Tax Cuts and Jobs Act of 2017 increased bonus depreciation to 100% for qualified property acquired and placed in service after September 27, 2017 and before January 1, 2023.

Bonus Depreciation History

The 50% first-year bonus depreciation provision enacted in 2008 was extended (retroactively for the entire 2009 tax year) under the same terms by the American Recovery and Reinvestment Act of 2009 (H.R. 1), enacted in February 2009. It was renewed again in September 2010 (retroactively for the entire 2010 tax year) by the Small Business Jobs Act of 2010 (H.R. 5297). In December 2010 the provision for bonus depreciation was amended and extended yet again by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (H.R. 4853). Under these amendments, eligible property placed in service after September 8, 2010 and before January 1, 2012 was permitted to qualify for 100% first-year bonus depreciation. The December 2010 amendments also permitted bonus depreciation to be claimed for property placed in service during 2012, but reverted the allowable amount from 100% to 50% of the eligible basis. The 50% first-year bonus depreciation allowance was further extended for property placed in service during 2013 by the American Taxpayer Relief Act of 2012 (H.R. 8, Sec. 331) in January 2013. The Tax Increase Prevention Act Of 2014 (H.R. 5771, Sec. 125)extended  these provisions through to December 31, 2014, and thus retroactively for the 2014 tax year.

For more information on the federal MACRS, see IRS Publication 946, IRS Form 4562: Depreciation and Amortization, and Instructions for Form 4562. The IRS web site provides a search mechanism for forms and publications. Enter the relevant form, publication name or number, and click "GO" to receive the requested form or publication. For guidance on bonus depreciation, including information relating to the election to claim either 50% or 100% bonus depreciation, retroactive elections to claim 50% bonus depreciation for property placed in service during 2010, and eligible property, please see IRS Rev. Proc. 2011-26.


*Note that the definitions of eligible technologies included in this entry are somewhat simplified versions of those contained in tax code, which often contain additional caveats, restrictions, and modifications. Those interested in this incentive should review the relevant sections of the code in detail prior to making business decisions.

Residential Energy Conservation Subsidy Exclusion (Corporate)U.S. Internal Revenue Service05/19/2303/28/24727

According to Section 136 of the U.S. Code, energy conservation subsidies provided (directly or indirectly) to customers by public utilities* are non-taxable. This exclusion does not apply to electricity-generating systems registered as "qualifying facilities" under the Public Utility Regulatory Policies Act of 1978 (PURPA). If a taxpayer claims federal tax credits or deductions for the energy conservation property, the investment basis for the purpose of claiming the deduction or tax credit must be reduced by the value of the energy conservation subsidy (i.e., a taxpayer may not claim a tax credit for an expense that the taxpayer ultimately did not pay).

The term "energy conservation measure" includes installations or modifications primarily designed to reduce consumption of electricity or natural gas, or to improve the management of energy demand. Eligible dwelling units include houses, apartments, condominiums, mobile homes, boats and similar properties. If a building or structure contains both dwelling units and other units, any subsidy must be properly allocated.

The definition of "energy conservation measure" implies that utility rebates for residential solar-thermal projects and photovoltaic (PV) systems may be non-taxable. However, the IRS has not ruled definitively on this issue. Taxpayers considering using this provision for a renewable energy system should discuss the details of the project with a tax professional. Other types of utility subsidies that may come in the form of credits or reduced rates might also be non-taxable, according to IRS Publication 525. 


* The term "public utility" is defined as an entity "engaged in the sale of electricity or natural gas to residential, commercial, or industrial customers for use by such customers." The term includes federal, state and local government entities.

Renewable Electricity Production Tax Credit (PTC)U.S. Internal Revenue Service08/29/2303/28/24734

Note: The Inflation Reduction Act of 2022 (H.R. 5376) made several significant changes to this tax credit, including extending the expiration date, providing for new bonus credits, and establishing new criteria to qualify for the full credit. It also phases out this tax credit under section 45 of the Internal Revenue Code at the end of 2024 and replaces it with a new technology-neutral tax credit under section 45Y of the Internal Revenue Code. The summary below describes the current section 45 tax credit as modified by the Inflation Reduction Act, and below that, the new 45Y tax credit.   

The federal renewable electricity production tax credit (PTC) is an inflation-adjusted per-kilowatt-hour (kWh) tax credit for electricity generated by qualified energy resources and sold by the taxpayer to an unrelated person during the taxable year. The duration of the credit is 10 years after the date the facility is placed in service.

Originally enacted in 1992, the PTC has been renewed and expanded numerous times, most recently by the Inflation Reduction Act of 2022. That bill established new prevailing wage and apprenticeship requirements for larger system to qualify for the full value of the tax credit -- 2.6 cents per kilowatt-hour (kWh) for wind, closed-loop biomass, and geothermal energy; 1.3 cents per kWh for open-loop biomass facilities, small irrigation power facilities, landfill gas facilities and trash facilities. In late-2022 or 2023, the Treasury Secretary will issue guidance for these new labor provisions. The credit for different project types and available bonus credits is described below.

Base Credit

Projects under 1 MW (or larger projects that are commenced no more than 60 days after the Treasury Secretary develops labor guidelines) do not need to meet the new labor standards established by the Inflation Reduction to receive the full 1.3 or 2.6 cents/kWh (depending on the facility type) tax credit. This amount may be adjusted annually for inflation. Such projects that begin construction after 2021 and before 2025 can receive the full tax credit. Note, projects that commence construction on or after January 1, 2025 can receive a tax credit under the new Clean Energy Production Tax Credit (45Y) described below. 

Projects over 1 MW that begin construction 60 days after the Treasury Secretary releases labor guidelines and no later than January 1, 2025 will receive a base tax credit of 0.5 cents/kWh. However, projects can qualify for the full tax credit if they ensure that all laborers and mechanics involved in the construction of the project or the maintenance of the project for the entire 10-year PTC period are paid wages at rates not less than prevailing wages. Projects must also ensure that a percentage of total labor hours are performed by qualified apprentices. The percent of hours increases over time to a maximum requirement of 15% in 2024 and thereafter. Note, projects that commence construction on or after January 1, 2025 can receive a tax credit under the new Clean Energy Production Tax Credit (45Y) described below. 

Bonus Credits

The Domestic Content Bonus increases the credit amount by 10% for projects in which 100% of any steel or iron that is a component of the facility and 40% of the manufactured products that are components of the facility were produced in the United States. Note, the required percentage of domestic manufactured products for offshore wind facilities is 20%. The IRS issued Notice 2023-38 in May 2023, which provided guidance on the domestic content bonus.     

The Energy Community Bonus increases the credit amount by 10% for projects that are located at one of the following: (i) a brownfield site, (ii) a metropolitan or non-metropolitan statistical area which (A) has (or, at any time during the period beginning after December 31, 2009, had) 0.17% or greater direct employment or 25% or greater local tax revenues related to the extraction, processing, transport, or storage of coal, oil, or natural gas, or (B) has an unemployment rate above the national average for the previous year, or (iii) a census tract or a census tract that is adjoining a census tract in which a coal mine has closed after 1999 or a coal-fired electric generating unit was retired after 2009. 

The Treasury Department issued Notice 2023- 29 in April 2023, which provided initial guidance on the Energy Community Bonus Credit. The Treasury Department later updated and clarified its guidance in June 2023 with Notice 2023-45. The Treasury Department also issued Notice 2023-47 in June 2023, which includes lists of information that taxpayers may use to determine whether they meet certain requirements under the Statistical Area Category or the Coal Closure Category. The Department of Energy has also released a GIS map showing the locations of qualifying energy communities.  

Credit Monetization

Section 13801 of The Inflation Reduction Act of 2022 also established procedures for other parties to monetize certain tax credits, including this one, for equipment placed in service on or after January 1, 2023 and through December 31, 2032. 

The direct pay option allows non-taxable entities to directly monetize certain tax credits. The provisions apply to nonprofits, a state or political subdivision thereof, the Tennessee Valley Authority, Indian tribal governments (as defined in Section 30D(g)(9)), any Alaska Native Corporation (as defined in Section 3 of the Alaska Native Claims Settlement Act), or any corporation operating on a cooperative basis which is engaged in furnishing electric energy to persons in rural areas. Such applicable entities can elect to be treated as having made a tax payment equal to the value of the tax credit they would otherwise be eligible to claim. The entity can then claim a refund for the excess taxes they are deemed to have paid. The option effectively makes this tax credit refundable for these entities. 

The act also allows eligible taxpayers to transfer all or a portion of their eligible tax credits to an unrelated taxpayer. Transfers must be reported to IRS and only one transfer is permitted. Must be elected no later than the due date for tax filing for the tax year the tax credit is claimed.

Clean Energy Production Tax Credit (45Y)

Section 13701 of the Inflation Reduction Act created a new tax credit, the Clean Energy Production Tax Credit to replace the traditional PTC for systems placed in service on or after January 1, 2025. The tax credit is functionally similar to the PTC, but is not technology-specific. It applies to all generation facilities that have an anticipated greenhouse gas emissions rate of zero. The credit amount is generally calculated in the same manner as described above, and all technologies that satisfy the labor requirements will be eligible for the full value of the tax credit as adjusted for inflation. The credit will be phased out as the U.S. meets greenhouse gas emission reduction targets. For a project whose construction is commenced in the year following the year in which greenhouse gas emissions from the production of electricity in the United States are equal to or less than 25% of the 2022 levels, the tax credit will not be reduced. However, for projects commenced in the second year following the target being met, the tax credit will be worth 75% of what it would otherwise be. Projects commenced in the third year will receive a credit worth 50%, and all projects commenced after then will not be eligible for a tax credit. 


Energy-Efficient Mortgages08/05/2003/28/24742

Homeowners can take advantage of energy efficient mortgages (EEM) to either finance energy efficiency improvements to existing homes, including renewable energy technologies, or to increase their home buying power with the purchase of a new energy efficient home. The U.S. federal government supports these loans by insuring them through Federal Housing Authority (FHA) or Veterans Affairs (VA) programs. This allows borrowers who might otherwise be denied loans to pursue energy efficiency, and it secures lenders against loan default.

FHA Energy Efficient Mortgages
The FHA allows lenders to add up to 100% of energy efficiency improvements to an existing mortgage loan with certain restrictions. FHA mortgage limits vary by county, state and the number of units in a dwelling. See their website for more details. These mortgages were previously limited to $8,000.The maximum amount of the portion of an energy efficient mortgage allowed for energy improvements is now the lesser of 5% of:

  • The value of the property,
  • 115% of the median area price of a single-family dwelling, or
  • 150% of the Freddie Mac conforming loan limit

Loan amounts may not exceed the projected savings of the energy efficiency improvements. These loans may be combined with FHA 203 (h) mortgages available to victims of presidentially-declared disasters and with financing offered through the FHA 203 (k) rehabilitation program. FHA loan limits do not apply to the EEM. Borrowers must obtain a home energy assessment by a qualified energy rater, assessor, or auditor using whole-assessment standards, protocols, and procedures. 

Borrowers may include closing costs and the up-front mortgage insurance premium in the total cost of the loan. The loan is available to anyone who meets the income requirements for FHA’s Section 203 (b), provided the applicant can meet the monthly mortgage payments. New and existing owner-occupied homes of up to two units qualify for this loan. Cooperative units are not eligible. Homebuyers should submit applications to their local HUD Field Office through an FHA-approved lending institution.

Department of Veterans Affairs (VA) Energy Efficient Mortgages
The VA insures EEMs to be used in conjunction with VA loans either for the purchase of existing homes or for refinancing loans secured by the dwelling. Homebuyers may borrow up to $3,000 if only documentation of improvement costs or contractor bids is submitted, or up to $6,000 if the projected energy savings are greater than the increase in mortgage payments. Loans may exceed this amount at the discretion of the VA. Applicants may not include the cost of their own labor in the total amount. No additional home appraisal is needed, but applicants must submit a HER, contractor bids and certain other documentation. The VA insures 50% of the loan if taken by itself, but it may insure less if the total value of the mortgage exceeds a certain amount.

This mortgage is available to qualified military personnel, reservists and veterans. Applicants should secure a certificate of eligibility from their local lending office and submit it to a VA-approved private lender. If the loan is approved, the VA guarantees the loan when it is closed.

Conventional EEMs
Conventional mortgages are not backed by a federal agency. Private lenders sell loans to Fannie Mae and Freddie Mac, which in turn allows homebuyers to borrow up to 15% of an existing home’s appraised value for improvements documented by a HER.

Fannie Mae also lends up to 5% for Energy Star new homes. Fannie Mae EEMs are available to single-family, owner-occupied units, and Fannie Mae provides EEMs to those whose income might otherwise disqualify them from receiving the loans by allowing approved lenders to adjust borrowers’ debt-to-income ratio by 2%. The value of the improvements is immediately added to the total appraised value of the home.

Freddie Mac offers GreenChOICE mortgages to "provide greater affordability for borrowers, offer more flexibility and combine the flexibilities of Home Possible Mortgages to offer borrowers additional affordable financing opportunities." Borrowers should apply directly to the lender. Click here for more details.

ENERGY STAR Partnership for Lenders
To promote EEMs and lenders who offer them, the federal ENERGY STAR program offers a partnership program for lenders who provide EEMs to borrowers. Becoming a partner allows lenders to utilize the Energy Star brand to promote themselves as Energy Star partners offering EEMs. To become a lender, partner lenders must first provide proof that they know how to write EEMs. To maintain their partnership benefits, lenders must write a certain number of EEMs per year. Energy Star does not have a lender certification program or process. Click here for more information about ENERGY STAR's lender partnership program, and here to access the partner locator tool. ENERGY STAR requires that its lender partners provide EEMs to qualified borrowers regardless of whether it is an FHA EEM, Fannie Mae EEM, or VA EEM.

USDA - Rural Energy for America Program (REAP) GrantsU.S. Department of Agriculture$600 million for FY 201808/21/1803/28/24917

Note: The U.S. Department of Agriculture's Rural Development issues periodic Notices of Solicitation of Applications for the Rural Energy for America Program (REAP) in the Federal Register. The FY 2018 solicitation for the REAP program includes a total budget of approximately $800 million. 

The Rural Energy for America Program (REAP) provides financial assistance to agricultural producers and rural small businesses in America to purchase, install, and construct renewable energy systems, make energy efficiency improvements to non-residential buildings and facilities, use renewable technologies that reduce energy consumption, and participate in energy audits and renewable energy development assistance.

Renewable energy projects for the Renewable Energy Systems and Energy Efficiency Improvement Guaranteed Loan and Grant Program include wind, solar, biomass and geothermal, and hydrogen derived from biomass or water using wind, solar, or geothermal energy sources. These grants are limited to 25% of a proposed project's cost, and a loan guarantee may not exceed $25 million. The combined amount of a grant and loan guarantee must be at least $5,000 (with the grant portion at least $1,500) and may not exceed 75% of the project’s cost. In general, a minimum of 20% of the funds available for these incentives will be dedicated to grants of $20,000 or less. For more information on grant, loan guarantees, loan financing, and opportunities for combinations thereof, visit the USDA website. 

Application due dates are published annually in the Notice of Funding Availability. 

Eligibility

Grants and Guaranteed Loans are generally available to small businesses and agricultural producers and other entities as determined by USDA. To be eligible for REAP grants and guaranteed loans, applicants must demonstrate sufficient revenue to cover any operations and maintenance expense as well as any applicable debt service of the project for the duration of the guaranteed loan or grant. Rural small businesses must be located in rural areas, but agricultural producers may be located in non-rural areas.

Eligible project costs include purchasing energy efficiency improvements or a renewable energy system, energy audits or assessments, permitting and licensing fees, and business plans and retrofitting. For new construction the replacement of older equipment with more efficient equipment may be eligible as a project cost only when a new facility is planned to be more efficient and similarly sized than the older facility. Working capital and land acquisition are only eligible for loan guarantees.

For more information regarding applicant and project eligibility for loans and grants, visit the USDA REAP eligibility webpage, read the eligibility requirements in the most recent Solicitation of Applications for REAP funding in the Federal Registry, and/or contact your state rural energy coordinator.

Regional rural energy coordinators provide loan and grant applications upon request.

History

The Food, Conservation, and Energy Act of 2008 (H.R. 2419), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program,* into the Rural Energy for America Program (REAP). Similar to its predecessor, the REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the new program in the following amounts: $55 million for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, up to $25 million in discretionary funding may be issued each year. The American Taxpayer Relief Act of 2012 (H.R. 8) extended discretionary funding for FY 2013. The 2014 Farm Bill reauthorized the USDA to offer these programs and removed the mandate to offer grants for feasibility studies.

* The Renewable Energy Systems and Energy Efficiency Improvements Program was created by the USDA pursuant to Section 9006 of the 2002 federal Farm Security and Rural Investment Act of 2002. Funding in the amount of $23 million per year was appropriated for each fiscal year from FY 2003-2007. In March 2008, the USDA announced that it would accept $220.9 million in applications for grants, loan guarantees, and loan/grant combination packages under the Renewable Energy Systems and Energy Efficiency Improvements Program. The application deadline was June 16, 2008.

Land grant colleges and universities are referred to in the summary table as "schools" and "institutional" eligible sectors. K-12 schools are not eligible for this grant.

Office of Indian Energy Policy and Programs - Funding OpportunitiesU.S. Department of Energy02/26/2003/28/24918

The U.S. Department of Energy's (DOE) Office of Indian Energy Policy and Programs promotes tribal energy sufficiency, economic growth, and employment on tribal lands through the development of renewable energy and energy efficiency technologies. The program provides financial assistance, technical assistance, and education and training to tribes for the evaluation and development of renewable energy resources and energy efficiency measures.

DOE's program offerings consist of program management through DOE headquarters, program implementation and project management through DOE's field offices, and technical support through DOE laboratories. Program management is carried out by DOE's Weatherization and Intergovernmental Program, which provides programmatic direction and funding to DOE field offices for program implementation. DOE's Golden Field Office solicits, awards, administers, and manages financial assistance agreements.

Program funding is awarded through a competitive process. Click here to view current program funding opportunities, and here to apply for technical assistance.

Residential Renewable Energy Tax CreditU.S. Internal Revenue Service08/16/2212/31/341235

Note: Section 13302 of The Inflation Reduction Act of 2022 (H.R. 5376) extended the expiration date and modified the phase down of this tax credit. It also made stand-alone energy storage systems eligible for the credit, and biomass heaters ineligible for the credit. Biomass heaters are now eligible for the residential energy efficiency tax credit. The summary below reflects the credit after the enactment of H.R. 5376.

A taxpayer may claim a credit for a system that serves a dwelling unit located in the United States that is owned and used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is at a new home, the "placed in service" date is the date of occupancy by the homeowner. Expenditures include labor costs for on-site preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. The maximum allowable credit, equipment requirements and other details vary by technology, as outlined below.

Solar-electric property

  • 30% for systems placed in service by 12/31/2019
  • 26% for systems placed in service after 12/31/2019 and before 01/01/2022
  • 30% for systems placed in service after 12/31/2021 and before 01/01/2033
  • 26% for systems placed in service after 12/31/2032 and before 01/01/2034
  • 22% for systems placed in service after 12/31/2033 and before 01/01/2035
  • There is no maximum credit for systems placed in service after 2008.
  • Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2034.
  • The home served by the system does not have to be the taxpayer’s principal residence.

Solar water-heating property

  • 30% for systems placed in service by 12/31/2019
  • 26% for systems placed in service after 12/31/2019 and before 01/01/2022
  • 30% for systems placed in service after 12/31/2021 and before 01/01/2033
  • 26% for systems placed in service after 12/31/2032 and before 01/01/2034
  • 22% for systems placed in service after 12/31/2033 and before 01/01/2035
  • There is no maximum credit for systems placed in service after 2008.
  • Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2034.
  • Equipment must be certified for performance by the Solar Rating Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed.
  • At least half the energy used to heat the dwelling's water must be from solar in order for the solar water-heating property expenditures to be eligible.
  • The tax credit does not apply to solar water-heating property for swimming pools or hot tubs.
  • The home served by the system does not have to be the taxpayer’s principal residence.

Fuel cell property

  • 30% for systems placed in service by 12/31/2019
  • 26% for systems placed in service after 12/31/2019 and before 01/01/2022
  • 30% for systems placed in service after 12/31/2021 and before 01/01/2033
  • 26% for systems placed in service after 12/31/2032 and before 01/01/2034
  • 22% for systems placed in service after 12/31/2033 and before 01/01/2035
  • Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2034.
  • The maximum credit is $500 per half kilowatt (kW).
  • The fuel cell must have a nameplate capacity of at least 0.5 kW of electricity using an electrochemical process and an electricity-only generation efficiency greater than 30%.
  • In case of joint occupancy, the maximum qualifying costs that can be taken into account by all occupants for figuring the credit is $1,667 per 0.5 kW. This does not apply to married individuals filing a joint return. The credit that may be claimed by each individual is proportional to the costs he or she paid.
  • The home served by the system must be the taxpayer’s principal residence.

Small wind-energy property

  • 30% for systems placed in service by 12/31/2019
  • 26% for systems placed in service after 12/31/2019 and before 01/01/2022
  • 30% for systems placed in service after 12/31/2021 and before 01/01/2033
  • 26% for systems placed in service after 12/31/2032 and before 01/01/2034
  • 22% for systems placed in service after 12/31/2033 and before 01/01/2035
  • There is no maximum credit for systems placed in service after 2008.
  • Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2034.
  • The home served by the system does not have to be the taxpayer’s principal residence.

Geothermal heat pumps

  • 30% for systems placed in service by 12/31/2019
  • 26% for systems placed in service after 12/31/2019 and before 01/01/2022
  • 30% for systems placed in service after 12/31/2021 and before 01/01/2033
  • 26% for systems placed in service after 12/31/2032 and before 01/01/2034
  • 22% for systems placed in service after 12/31/2033 and before 01/01/2035
  • There is no maximum credit for systems placed in service after 2008.
  • Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2034.
  • The geothermal heat pump must meet federal Energy Star criteria.
  • The home served by the system does not have to be the taxpayer’s principal residence

Battery Storage Systems (Standalone Systems)

  • 0% for systems placed in service before 1/1/2023
  • 30% for systems placed in service after 12/31/2022 and before 01/01/2033
  • 26% for systems placed in service after 12/31/2032 and before 01/01/2034
  • 22% for systems placed in service after 12/31/2033 and before 01/01/2035
  • The system must have a capacity of at least 3 kilowatt hours
  • The home served by the system does not have to be the taxpayer’s principal residence.


Significantly, The American Recovery and Reinvestment Act of 2009 repealed a previous limitation on the use of the credit for eligible projects also supported by "subsidized energy financing." For projects placed in service after December 31, 2008, this limitation no longer applies.

Energy Storage

Prior to the enactment of the Inflation Reduction Act of 2022, the federal tax code did not explicitly reference energy storage, so stand-alone energy storage systems did not qualify for the tax credit.  However, the IRS issued Private Letter Rulings in 2013 and 2018, which address energy storage paired with PV systems. In both cases, the IRS ruled that the energy storage equipment when paired with PV met the statutory definition of a "qualified solar electric property expenditure," as was eligible for the tax credit. It is important to note that Private Letter Rulings only apply to the taxpayer who requested it, and do not establish precedent. Any taxpayer considering the purchase of an energy storage system should consult their accountant or other tax professional before claiming a tax credit.  


History

Established by The Energy Policy Act of 2005, the federal tax credit for residential energy property initially applied to solar-electric systems, solar water heating systems and fuel cells. The Energy Improvement and Extension Act of 2008 extended the tax credit to small wind-energy systems and geothermal heat pumps, effective January 1, 2008. Other key revisions included an eight-year extension of the credit to December 31, 2016; the ability to take the credit against the alternative minimum tax; and the removal of the $2,000 credit limit for solar-electric systems beginning in 2009. The credit was further enhanced in February 2009 by The American Recovery and Reinvestment Act of 2009, which removed the maximum credit amount for all eligible technologies (except fuel cells) placed in service after 2008.

USDA - Rural Energy for America Program (REAP) Loan GuaranteesU.S. Department of Agriculture08/21/1803/28/242511

The Rural Energy for America Program (REAP) provides financial assistance to agricultural producers and rural small businesses in rural America to purchase, install, and construct renewable energy systems, make energy efficiency improvements to non-residential buildings and facilities, use renewable technologies that reduce energy consumption, and participate in energy audits and renewable energy development assistance.

Renewable energy projects for the Renewable Energy Systems and Energy Efficiency Improvement Guaranteed Loan and Grant Program include wind, solar, biomass and geothermal, and hydrogen derived from biomass or water using wind, solar, or geothermal energy sources. These grants are limited to 25% of a proposed project's cost, and a loan guarantee may not exceed $25 million. The combined amount of a grant and loan guarantee must be at least $5,000 (with the grant portion at least $1,500) and may not exceed 75% of the project’s cost. In general, a minimum of 20% of the funds available for these incentives will be dedicated to grants of $20,000 or less. For more information on grant, loan guarantees, loan financing, and opportunities for combinations thereof, visit the USDA website.

Application due dates are published annually in the Notice of Funding Availability.

Eligibility

Grants and Guaranteed Loans are generally available to small businesses and agricultural producers and other entities as determined by USDA. To be eligible for REAP grants and guaranteed loans, applicants must demonstrate sufficient revenue to cover any operations and maintenance expense as well as any applicable debt service of the project for the duration of the guaranteed loan or grant. Rural small businesses must be located in rural areas, but agricultural producers may be located in non-rural areas.

Eligible project costs include purchasing energy efficiency improvements or a renewable energy system, energy audits or assessments, permitting and licensing fees, and business plans and retrofitting. For new construction the replacement of older equipment with more efficient equipment may be eligible as a project cost only when a new facility is planned to be more efficient and similarly sized than the older facility. Working capital and land acquisition are only eligible for loan guarantees.

For more information regarding applicant and project eligibility for loans and grants, visit the USDA REAP eligibility webpage, read the eligibility requirements in the most recent Solicitation of Applications for REAP funding in the Federal Registry, and/or contact your state rural energy coordinator.

Regional rural energy coordinators provide loan and grant applications upon request.

History

The Food, Conservation, and Energy Act of 2008 (H.R. 2419), enacted by Congress in May 2008, converted the federal Renewable Energy Systems and Energy Efficiency Improvements Program,* into the Rural Energy for America Program (REAP). Similar to its predecessor, the REAP promotes energy efficiency and renewable energy for agricultural producers and rural small businesses through the use of (1) grants and loan guarantees for energy efficiency improvements and renewable energy systems, and (2) grants for energy audits and renewable energy development assistance. Congress has allocated funding for the new program in the following amounts: $55 million for FY 2009, $60 million for FY 2010, $70 million for FY 2011, and $70 million for FY 2012. REAP is administered by the U.S. Department of Agriculture (USDA). In addition to these mandatory funding levels, up to $25 million in discretionary funding may be issued each year. The American Taxpayer Relief Act of 2012 (H.R. 8) extended discretionary funding for FY 2013. The 2014 Farm Bill reauthorized the USDA to offer these programs and removed the mandate to offer grants for feasibility studies.

* The Renewable Energy Systems and Energy Efficiency Improvements Program was created by the USDA pursuant to Section 9006 of the 2002 federal Farm Security and Rural Investment Act of 2002Funding in the amount of $23 million per year was appropriated for each fiscal year from FY 2003-2007. In March 2008, the USDA announced that it would accept $220.9 million in applications for grants, loan guarantees, and loan/grant combination packages under the Renewable Energy Systems and Energy Efficiency Improvements Program. The application deadline was June 16, 2008.

Land grant colleges and universities are referred to in the summary as "schools" and "institutional" eligible sectors. K-12 schools are not eligible for this grant.

Sales and Use Tax Exemption for Community Renewable Energy ProjectsNebraska Department of Revenue03/20/2303/28/242576

Note: Enacted March 2015, L.B. 412 created the following requirement: "To the extent feasible, a C-BED project developer shall provide, in writing, notice of incentives pursuant to the Rural Community-Based Energy Development Act for local ownership and local participation in a C-BED project to each property owner on whose property a turbine will be located and to the elected governing body of each municipality or political subdivision in which a turbine will be located."

In May 2007 Nebraska established an exemption from the sales and use tax imposed on the gross receipts from the sale, lease, or rental of personal property for use in a community-based energy development (C-BED) project. Nebraska also enacted the Rural Community-Based Energy Development Act (L.B. 629) to authorize and encourage electric utilities to enter into power purchase agreements with C-BED project developers.

To claim the exemption, filing requirements imposed by the Tax Commissioner must be met.

Eligible Projects

A C-BED project is defined as a new energy generation project using wind, solar, biomass, or landfill gas as the fuel source that has at least 25% of the gross power purchase agreement payments flowing to the qualified owner or owners or as payments to the local community and has a resolution of support adopted by the county board of each county in which the C-BED project is located or by the tribal council for a C-BED project located within the boundaries of an Indian reservation.

“Payments to the local community” include, but are not limited to, lease and easement payments part of a C-BED project; contract payments to Nebraska companies that meet specific statutory requirements for services, materials, equipment, and components necessary to permit or construct the C-BED project; other parts, materials, or components that are manufactured, assembled, or fabricated in Nebraska not included above.

Qualified Project Owners

A qualified C-BED project owner means:

  • a Nebraska resident;
  • a limited liability company that is organized under the Limited Liability Company Act and that is entirely made up of members who are Nebraska residents;
  • a Nebraska nonprofit corporation;
  • an electric supplier(s), subject to certain limitations for a single C-BED project;
  • a tribal council;
  • a domestic corporation domiciled in Nebraska; or
  • a cooperative corporation domiciled in Nebraska
U.S. Department of Energy - Loan Guarantee ProgramU.S. Department of Energy09/08/2203/28/243071
Note: The Inflation Reduction Act (H.R. 5376) made several changes to this program. It appropriated approximately $11.7 billion in total for the Loan Programs Office (LPO) to support issuing new loans. This, in turn, increased the loan authority in LPO’s existing loan programs by approximately $100 billion. The Inflation Reduction Act also adds a new loan program, the Energy Infrastructure Reinvestment (EIR) Program (section 1706), to help retool, repower, repurpose, or replace energy infrastructure that has ceased operations or to improve the efficiency of infrastructure that is currently operating. 

Title 17 Program

Section 1703 of Title 17 of the Energy Policy Act (EPAct) of 2005 created the Department of Energy's (DOE's) Loan Guarantee Program. The program was reauthorized and revised by the American Recovery and Reinvestment Act (ARRA) of 2009 by adding Section 1705 to EPAct. The 1705 Program was retired in September 2011, and Loan Guarantees are no longer available under that authority. DOE, however, still has authority to issue Loan Guarantees under the old Section 1703 Program.  

Under Section 1703, DOE is authorized to issue loan guarantees for projects with high technology risks that "avoid, reduce or sequester air pollutants or anthropogenic emissions of greenhouse gases; and employ new or significantly improved technologies as compared to commercial technologies in service in the United States at the time the guarantee is issued." Loan guarantees are intended to encourage early commercial use of new or significantly improved technologies in energy projects. The loan guarantee program generally does not support research and development projects.

The Inflation Reduction Act added an additional $40 billion of loan authority to Section 1703 program. The legislation appropriated $3.6 billion in credit subsidy to support the cost of those loans and set aside a percentage of these amounts for administrative expenses to help carry out the program, including monitoring and originating new loans. This new loan authority is open to all currently eligible Title 17 Innovative Clean Energy technology categories, including fossil energy and nuclear energy. The Inflation Reduction Act appropriations also support the expanded activities authorized by the Bipartisan Infrastructure Law that required these new appropriations to go into effect. These expanded activities support projects involving critical minerals processing, manufacturing, and recycling, and removing the innovation requirement for State Energy Financing Institution-backed projects. Click here for more information about how a project that reduces greenhouse gas emissions can be eligible without meeting the innovative technology requirement if the project receives support from a State Energy Financing Institution . 

Energy Infrastructure Reinvestment (EIR) Program (Section 1706)

The Inflation Reduction Act also created a new program under Title 17, the Energy Infrastructure Reinvestment (EIR) Program. The new program targets projects that retool, repower, repurpose, or replace energy infrastructure that has ceased operations, or enable operating energy infrastructure to avoid, reduce, utilize, or sequester air pollutants or anthropogenic emissions of greenhouse gases. The Inflation Reduction Act appropriated $5 billion through September 30, 2026, to carry out EIR, with a total cap on loans of up to $250 billion. 

Advanced Technology Vehicles Manufacturing Loan Program

LPO initially had $15.1 billion in loan authority to support the manufacture of eligible light-duty vehicles and qualifying components under the Advanced Technology Vehicles Manufacturing Loan Program (ATVM), authorized by the Energy Independence and Security Act of 2007.  To date, the program has loaned $8 billion for projects that have supported the production of more than 4 million advanced technology vehicles. Read more about LPO's ATVM portfolio. The Inflation Reduction Act removed the $25 billion cap on the total amount of loans it can award and appropriated $3 billion to remain available through September 30, 2028 for the costs of direct loans under ATVM. In addition to amounts supported by currently appropriated credit subsidy, this $3 billion is estimated to provide for an additional ~$40 billion in loan authority for a total estimated available loan authority under ATVM of ~$55.1 billion. 

Tribal Energy Projects

The Tribal Energy Loan Guarantee Program (TELGP) supports tribal investment in energy-related projects by providing direct loans or partial loan guarantees to federally recognized tribe, including Alaska Native village or regional or village corporations; or a Tribal Energy Development Organization (TEDO) that is wholly or substantially owned by a federally recognized tribe federally recognized Indian tribe or Alaska Native Corporation. Under this solicitation, The Inflation Reduction Act increased the aggregate amount of loans available at any time under the Tribal Energy Loan Guarantee Program (TELGP) from $2 billion to $20 billion. It also provided $75 million to remain available through September 30, 2028 to carry out TELGP under section 2602(c) of the Energy Policy Act of 1992.

USDA - High Energy Cost Grant ProgramUSDA Rural Utilities Service$10 million (2021 solicitation)07/20/2203/28/244359

NOTE: The most recent solicitation for this program closed July 6, 2021. Please check the program website for information on future solicitations.

The U.S. Department of Agriculture (USDA) offers an ongoing grant program for the improvement of energy generation, transmission, and distribution facilities in rural communities. This program began in 2000. Eligibility is limited to projects in communities that have average home energy costs at least 275% above the national average. Retail power suppliers serving rural areas are eligible to apply for grant funding, including non-profits (cooperatives and limited dividend or mutual associations), commercial entities, state and local governments entities, and tribal governments. Under the most recent solicitation for projects, a total of $7 million was available for qualifying projects. Under this solicitation grants ranging from $100,000 to $3 million were available for a variety of activities, including:

  • Electric generation, transmission, and distribution facilities;
  • Natural gas or petroleum storage or distribution facilities;
  • Renewable energy facilities used for on-grid or off-grid electric power generation, water or space heating, or process heating and power;
  • Backup up or emergency power generation or energy storage equipment; and
  • Weatherization of residential and community property, or other energy efficiency or conservation programs.

This grant program is not limited to renewable energy or energy conservation and efficiency measures, but these measures are eligible for this grant program.

Property Tax Exemption for Renewable Energy Generation FacilitiesNebraska Department of Revenue03/20/2303/28/244946

Note: In May 2015, L.B. 424 was enacted, which adds solar, biomass, and landfill gas tangible personal property to this exemption effective January 1, 2016. This exemption is only applicable for wind energy tangible personal property prior to this date.

Personal Property

In 2010 Nebraska created a nameplate capacity tax that replaced the Nebraska Department of Revenue's central assessment and taxation of depreciable tangible personal property associated with wind energy generation facilities (see L.B. 1048). In 2015, eligibility was extended to solar, biomass, and landfill gas (see L.B. 424).

The nameplate capacity tax is $3,518 per installed megawatt (MW). On March 1 of each year, the owner of a renewable generation facility must file with the Department of Revenue a report on the nameplate capacity of the facility for the previous calendar year. Nameplate capacity taxes for any calendar year are due on April 1 of the following year. The Department of Revenue pays all proceeds related to the tax to the county treasurer of the county where the wind energy generation facility is located.

Eligibility

Any depreciable tangible personal property used directly in the generation of electricity using wind, solar, biomass, or landfill gas as the fuel source and has a nameplate capacity of 100 kilowatts (kW) or more is exempt from the property tax levied on depreciable tangible personal property. Depreciable tangible personal property includes, but is not limited to, wind turbines, rotors and blades, solar panels, towers, trackers, generating equipment, transmission components, substations, supporting structures or racks, inverters, and other system components such as wiring, control systems, switchgears, and generator step-up transformers.

Exemptions

Renewable energy facilities are exempt from both the nameplate capacity tax and the real property tax assessment if they are owned by the federal government; the State of Nebraska; a public power district; a public power and irrigation district; a municipality; a registered group of municipalities; an electric membership association; a cooperative; or an electricity customer-generator, which is someone who installs an eligible renewable energy system with a capacity of 25 kW or less on his or her side of the meter, interconnects to the grid, and uses the electricity generated by the renewable energy system to offset his or her requirements for electricity at the location of the system.

Real Property

The real property of the facility is subject to local assessment. While supporting structures to wind turbines are exempted, real property upon which wind generation facilities are based will not be exempt from property taxes. Real property associated with wind energy generation includes, but is not limited to, concrete pads, foundations, operations and maintenance buildings, road construction, leasehold value, and lease payments, and it is assessed at 100% of actual value.

Renewable Energy

Directive 16-1 superseded Directive 11-3, stating that the tangible personal property used directly in the generation of electricity using solar, biomass, or landfill gas is exempt from property tax if the depreciable tangible personal property was installed on or after January 1, 2016, and has a nameplate capacity of 100 kilowatts or more. Directive 23-3 now supersedes Directive 16-1.

Sales and Use Tax Exemption for Renewable Energy PropertyNebraska Department of Revenue12/05/2303/28/245427

Nebraska allows for a refund of the sales and use taxes paid for a renewable energy system used to produce electricity for sale. Investment in qualified property of at least thirty million dollars or for the production of electricity by using one or more sources of renewable energy to produce electricity for sale as described in subdivision (1)(j) of section 77-5715, investment in qualified property of at least twenty million dollars. The law describes eligible sources of renewable energy as including, but not limited to, wind, solar, geothermal, hydroelectric, biomass, and transmutation of elements. This refund does not apply to the first 1.5% of sales tax charged by a municipality.  

Note that partial recapture of benefits is possible if the taxpayer or tax-paying entity does not maintain the number of equivalent employees as they had in the base year. 

More information can be found here.

Fannie Mae Green Financing – Loan Program05/08/2003/28/245780

NOTE: Only multifamily properties are eligible for the program. Single family homeowners are not eligible for this program. 

The Fannie Mae Green Financing Business provides mortgage financing to apartment buildings and cooperatives (with 5 or more units) to finance energy and water efficiency property improvements. Its green financing programs include Green Rewards, and preferential pricing for loans secured by a property with an eligible Green Building Certification. All Fannie Mae green loans are securitized as Green Mortgage Backed Securities (Green MBS). To learn more about these programs, multifamily property owners should coordinate with a Fannie Mae DUS Lender:  https://multifamily.fanniemae.com/about-multifamily/our-partners/dus-lenders

Green Rewards, launched in 2015, provides preferential pricing and up to an additional 5% of loan proceeds by including up to 75% of projected owner energy and water savings and 25% of projected tenant savings in the loan underwriting. Conventional and affordable multifamily properties, as well as cooperatives, seniors, military, and student housing properties are eligible for this program. To qualify for a Green Rewards loan the property owner must commit to making property improvements that are projected to reduce the whole property’s annual energy and water consumption by at least 30%, which a minimum of 15% must be attributable to savings in energy consumption. Properties may be located anywhere in US, and the selected property upgrades must be completed within 12 months of loan closing.

Fannie Mae also provides preferential pricing for an acquisition or refinance loan on a conventional or affordable property that has a current, eligible Green Building Certification per Fannie Mae Form 4250.

Please visit the Fannie Mae Green Financing website for more information and detailed program requirements.

Local Option - Property-Assessed Clean Energy Financing12/27/2303/28/245869

In 2010, the Federal Housing Finance Agency (FHFA), which has authority over mortgage underwriters Fannie Mae and Freddie Mac, directed these enterprises against purchasing mortgages of homes with a PACE lien due to its senior status above a mortgage. Most residential PACE activities subsided following this directive; however, some residential PACE programs are now operating with loan loss reserve funds, appropriate disclosures, or other protections meant to address FHFA's concerns. Commercial PACE programs were not directly affected by FHFA’s actions, as Fannie Mae and Freddie Mac do not underwrite commercial mortgages. Visit PACENation.org for more information about PACE financing and a comprehensive list of all PACE programs across the country.

The Property Assessed Clean Energy Act was signed on April 13, 2016. This law allows municipalities to create clean energy assessment districts. Municipalities that create such districts may enter into contracts with qualifying property owners and (if participating) third-party financiers to provide financing for energy efficiency and renewable energy projects on the qualifying property. The projects are paid back through assessments on the owner's property taxes.

Check with your local Nebraska Municipality to see if PACE financing is available.