EPACT 2008 Provides Power Opportunities

October 27, 2008 by Jeff Shepard

The recently passed U.S. Emergency Economic Stabilization Act of 2008 (P.L. 110-343) included, extended, and/or amended, a total of 16 energy tax incentive programs for businesses, utilities, and government agencies originally introduced in the Energy Policy Act of 2005 (EPACT). Many of these programs will have a positive impact on the power electronics industry.

Among the energy tax incentives in EPACT that will have a positive impact on the power electronics industry: renewable energy incentives, transportation and domestic fuel security tax credits, energy conversation and efficiency credits, renewable energy tax credits (including solar energy, fuel cells and microturbines), energy investment tax credits, tax credits for energy-efficiency improvements to existing and new homes, energy-efficient buildings deduction, plug-in electric vehicle credit, energy efficient appliance credit, idling reduction units and advanced insulation for heavy trucks, accelerated depreciation for smart meters and smart grid systems, green buildings, sustainable design projects, and more.

Examples of these incentives include a tax deduction for building owners of up to $1.80 per square foot of building floor area for achieving a 50% energy savings target. This energy savings can be accomplished through one or more of the following building systems: heating, cooling, ventilation, hot water and interior lighting.

A tax credit is offered to manufacturers for the production of energy-efficient dishwashers, clothes washers and refrigerators. A 30% tax individual tax credit has been extended for residential solar electric expenditures through the end of 2016. Utilities can receive accelerated depreciation (10 years instead of 20 years) for smart electric meters and smart electric grid equipment. Tax credits are available to individuals and businesses for the purchase of hybrid-electric cars and trucks.

In addition to federal tax incentives, come consumers will also be eligible for utility or state rebates, as well as state tax incentives for energy-efficient homes, buildings, vehicles and equipment.