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Renewable Energy Incentives, Renewable Energy Payback



Renewable Energy Incentives

Incentive program exist that generously reward those who install renewable energy systems. Financial incentive programs have been developed on the local, state and federal levels to help encourage and foster the development of renewable energy.  Incentives include tax credits, tax deductions, property tax relief, depreciation, purchase incentives (rebates), production incentives, and more.


Clean, self-sufficient energy sources are more feasible and much more affordable than ever before.  State and federal energy incentives, including rebates, tax credits and net-metering, can help you install a renewable energy system and still stay within your budget.

The federal government offers a variety of tax credits and incentives for residential and commercial/business renewable energy improvements. These federal tax credits are important because they are a dollar-for-dollar deduction from taxes owed to the US Government.  Most states have rebate programs and/or tax deduction allowances for renewable energy systems.


The many incentive programs available contribute significantly to the bottom-line cost and accelerate the cost-vs.-payback benefit of the renewable energy system.  The current incentives provide a great opportunity to implement renewable energy in your home or business.  State and Federal governments recognize the benefits of stimulating renewable energy growth for environmental purposes and to lessen the demand for fossil fuels.  Please can take advantage of the many incentive opportunities.


The following attachments are provided for reference.  For more information and a complete list of available incentives, visit the Database of State Incentives for Renewable and Efficiency (DSIRE) at www.DSIREusa.org





Federal – 30% Residential Renewable Energy Tax Credit

Incentive Type:  Personal Tax Credit

Applicable Sectors:  Residential            


Federal – 30% Business Energy Investment Tax Credit (ITC)

Incentive Type:  Corporate Tax Credit

Applicable Sectors:  Commercial, Industrial, Utility, Agricultural  



Federal – Modified Accelerated Cost-Recovery System (MACRS)

+ Bonus Depreciation

Incentive Type:  Corporate Depreciation

Applicable Sectors:  Commercial, Industrial, Agricultural 



Federal – USDA – Rural Energy for America Program (REAP) Grants

Incentive Type:  Federal Grant Program

Applicable Sectors:  Commercial, Schools, Local Government, State Government, Tribal Government, Rural Electric Cooperative, Agricultural, Institutional, Public Power Entities          


Idaho – Income Tax Deduction, 40% the First Year 20% per Year for Next Three Years

Incentive Type:  Personal Deduction

Applicable Sectors:  Residential            


Idaho – Low-Interest Energy Load Program

Incentive Type:  State Loan Program

Applicable Sectors:  Commercial, Industrial, Residential, Schools, Local Government, State Government, Agricultural, Institutional, Hospitals



Oregon – Residential Energy Tax Credit

Incentive Type:  Personal Tax Credit

Applicable Sectors:  Residential            


Idaho Power Net Metering

Net Meter Application

Net Metering Frequently Asked Questions



Matrix Renewable Energy will assist you in determining and obtaining the proper incentive(s) for your specific renewable energy application.






Renewable Energy Payback


Renewable energy systems are a wise investment in terms of payback.  Financial payback benefits result in money in your bank account while paybacks such as environmental and social benefits are not usually calculated in dollars.  It is well proven that solar photovoltaic (PV) and solar hot water (SHW) systems will pay you back and provide a favorable return on investment (ROI).


The payback periods will vary with location and application depending upon the climate, the cost of utility-generated electricty, petroleum based heating fuels, and installation costs.  Financially, off-grid PV and solar hot water systems, used for space heating and pool heating, have the quickest payback of small-scale solar renewable energy systems.  Off-grid PV systems can provide an immediate ROI if the cost is high to extend commercial power to a remote site.  Solar hot water heating systems can have a payback period of < 3 years (or quicker if the use of propane is reduced)  Current incentives, which are very attractive, accelerate the payback period of renewable energy systems.  


While financial payback considerations are important, an equal consideration is the reduction of pollutants such as carbon dioxide (CO2), sulfur dioxide (SO2), and nitrogen oxides (NOx), as a result of replacing commercial energy – which includes hydropower, nuclear, oil, and coal based generation, with clean renewable energy systems.  Renewable energy systems reduce greenhouse gas emissions and air pollutants while they are paying back the up-front cost, and will continue to produce pollution-free energy after they have achieved financial payback.


Inflation, coupled with energy price history and forecasts, indicate continued increases in commercial power and fuel sources into the future, which will result in more rapid payback of renewable energy systems.  According to the Energy Information Administration utility rates are projected to increase annually by nearly 4%.  It is noted that conventional payback determination are based on utility rates which do not account for “externalities”.  If consumers had to pay for the true price of conventional energy (coal, natural gas, fuel oil, and nuclear) without the benefit of hidden subsidies and unaccounted for environmental and social cost payback periods for renewable energy systems would decrease dramatically.



Matrix Renewable Energy will assist you in determining the payback period for your specific renewable energy application.