Solar Photovoltaics

Residential Renewable Energy Tax Credit

Note: Section 13302 of The Inflation Reduction Act of 2022 (H.R. 5376) extended the expiration date and modified the phase down of this tax credit. It also made stand-alone energy storage systems eligible for the credit, and biomass heaters ineligible for the credit. Biomass heaters are now eligible for the residential energy efficiency tax credit. The summary below reflects the credit after the enactment of H.R. 5376.

A taxpayer may claim a credit for a system that serves a dwelling unit located in the United States that is owned and used as a residence by the taxpayer. Expenditures

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Energy-Efficient Mortgages

Homeowners can take advantage of energy efficient mortgages (EEM) to either finance energy efficiency improvements to existing homes, including renewable energy technologies, or to increase their home buying power with the purchase of a new energy efficient home. The U.S. federal government supports these loans by insuring them through Federal Housing Authority (FHA) or Veterans Affairs (VA) programs. This allows borrowers who might otherwise be denied loans to pursue energy efficiency, and it secures lenders against loan default.

FHA Energy Efficient Mortgages
The FHA allows lenders to add up to 100% of energy efficiency improvements to an existing mortgage loan

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Renewable Electricity Production Tax Credit (PTC)

Note: The Inflation Reduction Act of 2022 (H.R. 5376) made several significant changes to this tax credit, including extending the expiration date, providing for new bonus credits, and establishing new criteria to qualify for the full credit. It also phases out this tax credit under section 45 of the Internal Revenue Code at the end of 2024 and replaces it with a new technology-neutral tax credit under section 45Y of the Internal Revenue Code. The summary below describes the current section 45 tax credit as modified by the Inflation Reduction Act, and below that, the new 45Y tax

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Local Option - Commercial Property Assessed Capital Expenditure (C-PACE)

S.B. 802 of 2024 authorized the establishment of a statewide Commercial Property Assessed Capital Expenditure (C-PACE) program that local governments may voluntarily join. Eligible properties include commercial, industrial, agricultural, nonprofit, and multifamily residential properties with five or more dwelling units. The bill establishes the Economic Development Partnership of North Carolina as the statewide administrator for the program and assigns a variety of tasks to it: 

  • Prepare a C-PACE toolkit, as described in S.B. 802, in consultation with stakeholders and local governments
  • Impose fees to offset the actual and reasonable costs of administering the C-PACE Program, including an application fee not
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Montana Commercial PACE Financing Program

Property-Assessed Clean Energy (PACE) financing effectively allows property owners to borrow money to pay for energy improvements. The amount borrowed is typically repaid via a special assessment on the property over a period of years. In 2021, S.B. 147 authorized the creation of a Commercial PACE (C-PACE) program to be administered by the Montana Facility Finance Authority (MFFA). To be eligible, properties must be located in a Montana city, county, town, or a consolidated city-town that has or will establish a C-PACE District. C-PACE District designation is tracked by the MFFA and may be viewed here.

The C-PACE program

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Renewable Energy and Energy Storage Facility Siting

On November 28, 2023, Governor Gretchen Whitmer signed House Bill 5120 (PA 233 of 2023) which provides siting authority to the Michigan Public Service Commission (MPSC) for utility-scale wind, solar, and energy storage facilities under specified conditions. The MPSC has engagement sessions scheduled that are open to the public to gather input on the implementation of PA 233.

What facilities are covered by PA 233?

  • The siting process created in PA 233 applies to
  • Solar facilities with a nameplate capacity of 50 MW or more,

  • Wind facilities with a nameplate capacity of 100 MW or more, and
  • Energy storage facilities
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Interconnection Standards

Alabama does not have statewide interconnection standards. 

Southern Company, the parent company of Alabama Power Company, does have a policy on operation of distributed energy resources (DER) in parallel with the distribution system. 

The policy does not give explicit information on system size limits in relation to levels of review. The scope of any required system impact study is determined jointly by the DER owner and the utility. Following the system impact study, an interconnection equipment study may also be required. Incorporation of energy storage systems may require additional study.

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Note: In 2010, the Federal Housing Finance Agency (FHFA), which has authority over mortgage underwriters Fannie Mae and Freddie Mac, directed these enterprises against purchasing mortgages of homes with a PACE lien due to its senior status above a mortgage. Most residential PACE activity subsided following this directive; however, some residential PACE programs are now operating with loan loss reserve funds, appropriate disclosures, or other protections meant to address FHFA's concerns. Commercial PACE programs were not directly affected by FHFA’s actions, as Fannie Mae and Freddie Mac do not underwrite commercial mortgages. Visit PACENation for more information about PACE financing

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