Business Energy Investment Tax Credit – BEC


business energy investment tax credit

The Business Energy Investment Tax Credit (BETC) is a U.S. federal tax credit that is available to small, medium, and large commercial, industrial, and utility companies. Several criteria need to be satisfied for an eligible company to qualify for this credit. If you meet the required criteria, qualifying for this tax credit can help you lessen your financial burden and thereby increase your profit. An eligible company must be a publicly-traded company that meets specific investment requirements. Such companies include publicly traded oil refineries, including pipelines owned by those who are oil refineries or affiliates, as well as publicly-traded oil production facilities. Also excluded from eligibility are certain partnerships that result in a direct sale of assets to the qualifying oil refineries or oil production facilities.

PSTC

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One type of eligible business energy investment tax credit is the Production Tax Credit or the PSTC. The production tax credit is designed to provide small producers with renewable resources with significant cost savings. It is also designed to assist in reducing the nation’s dependence on imported oil. This credit is available to companies that employ fewer than twenty employees who use solar power to produce electricity or less than twenty-five employees who use wind power to produce electricity.

SEPTIC

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Another eligible business energy investment tax credit is the Solar Energy Property Investment Tax Credit, or the SEPTIC. Like the PSTC, it provides eligible property owners with significant cost savings and incentives. Like the PSTC, it provides incentives for producing energy from environmentally sustainable resources such as solar power. Both these credits reduce the nation’s dependency on imported oil.

RRES

The third type of eligible business energy investment tax credit is the Residential Renewable Energy Credit or the RRES. Like the other two credits, it provides tax incentives for generating energy from environmentally sustainable resources, including solar power. Again, like the PTC and the S ETFT, it reduces the nation’s dependency on imported oil. Like the S ETFT, the R RES qualifies for an application for a refund, if the manufacturer demonstrates that the investment made in installing the system was not a “fatal” error. To qualify for this tax credit, manufacturers must apply for an application and offset the cost of procuring the feed-in tariff with revenue from electric consumption charges on residential customers.

Additional Credit Benefits

There are two other additional business energy investment tax credit benefits. The first is the production energy credit, which is available to manufacturers of certain types of residential and small commercial solar energy systems. Also, there is a qualified gas turbine tax credit. Manufacturers of qualified gas turbines are eligible for this tax credit. This tax credit is available to manufacturers that choose to sell their qualifying gas turbines to consumers, instead of to energy suppliers.

The second of the business energy tax credits is the research and development credit. This tax credit is available for both new and used technologies. Again, there is a specified amount that can be claimed based on the percentage level of energy capacity that was eligible in the prior year. However, the amount is dependent upon the amount that was claimed in the previous year.

The third business investment tax credit is the residential renewable energy tax credit. It provides tax incentives for manufacturers to install and produce energy-efficient systems in homes. This credit is available for those who install and use systems that provide at least 50% of the electricity that the typical home uses. The producers of these systems are eligible to claim up to ten thousand dollars in tax credits. To qualify, a manufacturer must demonstrate that the project will reduce a home’s emissions and produce electricity at a higher percentage than the average level of electricity that the household uses. To take advantage of this opportunity, it is recommended that manufacturers consider installing such systems only in residences that will be utilized primarily by people who will use the electricity.

Conclusion

The fourth business energy investment tax credit is the home energy efficiency credit. The tax credit is available for those who choose to upgrade their home’s heating and cooling systems to more efficient ones. Up to three hundred dollars in tax credits can be claimed for this improvement. Those claiming one hundred thousand dollars or more in tax credits are eligible for an additional ten thousand dollars. When considering whether to invest in new and efficient systems, it is advised that contractors also check out the federal and local sources for grants and other assistance that may be available to assist them with their projects.

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