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Many Tools In Toolbox For Meeting Your Organization’s Sustainable Energy Goals – Renewables


Many organizations have developed ESG and other sustainable
energy goals, including increasing their energy efficiency,
increasing their use of renewable or other carbon free or carbon
neutral energy, reducing their carbon footprint and increasing
their use of electric or other alternative fuel vehicles.
Fortunately, there are many financial and other tools that can be
used to cost-effectively work to meet your goals and, in many
cases, to obtain cost savings while pursuing your goals.

Solar and small wind Investment Tax Credit
). The federal government provides up to a
26 percent tax credit for among other things the installation of
solar photovoltaic, solar heating, solar plus storage, small wind
generation and small wind plus storage, provided construction
“begins” this year. If it begins next year, the credit is
reduced to 22 percent and if it begins after that, it is reduced to
10 percent, and ultimately to zero. So, if your organization is
considering incorporating renewable energy that qualifies for the
investment tax credit, it is important to have a plan to meet the
begin construction requirements, which allow alternative methods of
compliance through on-site actual physical construction, off-site
actual physical construction or meeting a 5 percent spend
“safe harbor.” However, each of these methods have
specific requirements that are important to make sure you meet. For
example, the off-site actual physical construction requirement does
not allow for the purchase of inventory-type equipment, and all
methods have requirements for continuation of construction.

Significant tax depreciation benefits. In
addition to investment tax credits on certain clean energy systems,
substantial depreciation benefits are available on most energy
equipment, including solar, battery storage, charging equipment and
energy-efficient equipment. For some entities, because of the 2017
Tax Reform Act, immediate expensing may be available, and others
likely may be able to take advantage of an accelerated MACRS
depreciation schedule. For organizations receiving the investment
tax credit on solar or other projects, the depreciable basis of the
energy equipment is reduced by one-half of the tax credit received,
but depending on your organization’s tax situation, the
combination of the tax credit and depreciation benefits may reduce
the effective cost of ITC-eligible clean energy improvements by up
to 50 percent or more.

Potentially taking advantage of benefits of tax credit
and depreciation even if your organization does not pay
. If your organization is tax exempt, non-taxable,
has a special tax status (e.g., a real estate investment trust or
cooperative), or does not have sufficient tax liability to take
advantage of the ITC and depreciation, it still may be able to
share in the value of these significant tax benefits through solar
service agreements or power purchase agreements to the extent
allowed by local utilities and state law. In some cases, equipment
leasing may be used instead. Also, some utilities have beneficial
tariff programs that efficiently share available tax benefits with
utility customers. For example, Madison Gas & Electric’s
Renewable Energy Rider Program has become a popular opportunity for
our clients and others to receive the value of solar tax benefits
by receiving clean energy and capacity credits from dedicated
utility-owned systems at a reduced price that reflects the tax

Grants and other incentives. Whenever pursuing
any clean energy project, it is important to check out available
grants and other incentives. For example, Wisconsin’s Focus on
Energy program includes incentives for numerous energy efficiency
measures as well as renewable energy systems, and most other states
have similar programs. Especially if your organization is pursuing
significant energy improvements or plans to build new energy
efficient facilities, it can be valuable to connect with a Focus on
Energy representative to make sure you are taking maximum advantage
of Focus incentives. Also, Wisconsin provides competitive an Energy
Innovation Grant Program (EIGP) that can pay for up to half of the
cost of energy improvements, and energy efficiency and renewable
energy improvements in rural areas can potentially receive 25
percent Rural Energy for America Program competitive grants from

Low-cost financing options. In addition to tax
benefits and grants, your organization may be able to take
advantage of low-cost financing opportunities for its sustainable
energy projects. For example, most Wisconsin counties allow for
property accessed clean energy (PACE) financing, which allows for
energy efficiency and renewable energy projects to be financed
through a special assessment on the property instead of a
traditional loan. This can allow for a reduced effective interest
rate and can potentially free up capital for other needs.

Rental of land for solar or solar plus storage
. If your organization has excess land that is
presently unused, farmed, or that otherwise receives low or no
rent, you may want to consider whether it would be valuable to rent
for it for solar or solar plus energy storage as a part of your
organization’s sustainability initiatives and to receive
substantial rental income. Several of our clients with farmland
have entered option and lease agreements to rent their farmland for
several times the income they would receive under a crop lease.

EV charging. Significant additional electric
vehicle charging is needed as more and more EVs hit the road.
Adding charging capacity will be critical to your
organization’s operations if you plan to go electric. Also, it
can a valuable opportunity to bring customers to your retail and
other operations, since they can shop, eat, be entertained, or
otherwise visit your facilities while they charge. If your
organization is interested in increasing your charging capacity,
especially if you have facilities along facilities along designated
alternative fueling corridors, it is important to follow Wisconsin
and other states’ plans to receive and distribute their share
of the $5 billion in EV charging funding for
. Also, if your organization is a state, metropolitan
planning organization, local government, political subdivision, or
tribal government, it is important to track the $2.5 billion total
available under the discretionary grant program for charging and
fueling infrastructure under the Infrastructure Act directly
available to those organizations on a competitive basis. In
addition, it is important to consider partnership opportunities to
finance the cost of charging at your facility. For example, Tesla’s destination charging program could
be valuable to your organization.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.


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