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Integrated Recovery Guide - Energy Tax Credits: Manufacturers and Producers
Clean Energy and Energy Efficiency Tax Credits: Manufacturers and Producers of Clean Energy
Clean Energy Manufacturers and Producers are eligible for the following opportunities, which, in combination with previously existing tax credit in the state, make New Mexico a financially appealing location for new energy producers to locate. This would fuel our local economy and create jobs in our state.
- Clean-Tech Manufacturing. ARRA establishes the first federal credit to incentivize domestic manufacturing of advanced energy property: technologies that harness renewable resources to produce energy (such as solar panels, wind turbines, and geothermal heat pumps), technologies that increase energy efficiency (such as advanced insulation), and those that reduce greenhouse gas emissions (like carbon capture technologies). The credit will equal 30% of capital expenditures; the Treasury Secretary will establish an application process to distribute up to $2.3 billion in credits, leveraging $7.7 billion in new capital investment. This new federal credit will complement New Mexico’s existing advanced energy product manufacturer’s credit, which equals 5% of capital expenditures for manufacturers of photovoltaic, solar thermal, wind, or biomass electric generation systems; electric or hybrid vehicles; and fuel cell systems.
- Long-term Extension and Modification of Renewable Energy Production Tax Credit. The bill extends the production tax credit for energy produced by renewable resources through December 2012 for wind, and December 2013 for biomass, geothermal, small irrigation, hydropower, landfill gas, waste-to-energy, and marine renewable facilities. For wind, closed-loop biomass, and geothermal resources, the credit is 2.1 cents/kwh; for marine/hydrokinetic, open-loop biomass, small irrigation power, incremental hydropower, and municipal solid waste, the credit is 1.0 cents/kwh. The credit is generally available for the first 10 years of a facility’s existence. Additionally, firms that qualify for the production tax credit can instead take an investment tax credit for 30% of the facility’s cost in the year the facility is placed in service. New Mexico is well poised to benefit; for instance, our state ranks 12th among states in wind energy potential.
- Qualified Energy Conservation Bonds. ARRA authorizes an addition $2.4 billion of qualified energy conservation bonds to finance State, municipal, and tribal government programs and initiatives designed to reduce greenhouse gas emissions. The advantage of these bonds is that they are issued with a 0% interest rate; the Federal government pays all interest costs. New Mexico will receive bonding authority relative to our proportion of the national population (including a special “large city” set-aside for Albuquerque).