Stimulus Plan and Energy Tax Credits

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					               The Stimulus Plan
    Energy and Environment Investment Overview

The Stimulus Plan
Section I: Overview

Stimulus Overview: Our Perspective
Private Sector Plays an Enormous Role

    Under the Obama Administration’s Stimulus Plan, 90 percent of the jobs to
    be created from the investment are targeted for the private sector. In its
    broad sense, the Stimulus Plan specifies that:

          Stimulus Overview:
          The Stimulus Plan focuses on 8 broad streams


Stimulus Overview:
The Highlights

•  Implemented by wide range of federal, state and local government
•  Accelerated timetable-money available until September 30, 2010
•  Preference to projects that can be started quickly with goal to use at
   least 50% of funds on projects that can be started within 120 days of
   enactment of legislation (Feb. 17th)
•  Distribution of funds through new grant programs, programs parallel
   to existing funding mechanisms, new regulations
•  Incredible transparency and scrutiny-dedicated to oversight
•  Significant reporting requirements
•  Some Buy American provisions
Tax Relief for companies: $51 Billion

The Stimulus Plan
Section II: Energy Appropriation

American Recovery and Reinvestment Act of 2009 (ARRA)

Energy Efficiency Allocations by Department

Agency                                          Allocation
Department of Energy (DOE)                      $36 billion
Housing and Urban Development (HUD)             $1 billion
Department of Defense (DOD)                     $300 million
Department of Education (DOED)                  $10 billion
Environmental Protection Agency (EPA) Clean     $1.2 billion
Water and Drinking Water State Revolving Fund
Tax Credits                                     $21.6 billion

DOE Appropriations
I. Energy Efficiency Conservation Block Grants – $3.2 billion

Goal: Reduce energy use and carbon emissions (improve energy
efficiency in the transportation, building and other appropriate
sectors) at the local and regional level.
Allocation: Percentages set by EISA: Funds can also be used for
 a wide variety of activities – from caulking windows to large solar
installations – strategic planning, consultant services, and energy

DOE Appropriations
II. Weatherization Assistance Program- $5 billion

Goal: Enables low-income families to permanently reduce their
energy bills by making their homes more energy efficient.
Allocation: DOE employs a formula to allocate funding to
each of the states and territories. Each state and territory, in
turn, decides how to allocate its share of the funding to
local governments and jurisdictions.
•    Program Increase: over 500% increase from FY 2008 allocation ($780 million)
•    Individual allocation increased from $2,000 to $6,500 per home (state has
     authority to raise to $6,500

Other DOE Appropriations
III. Smart Grid - $4.5 billion

Goal: For grid modernization and related technologies, such
as electricity storage. (Federal matching fund requirement for
smart grid investments that was set at 20% in EISA is
increased to 50%.)

Allocation: EISA allocation – can go to public power and
privately owned transmission system

Other DOE Appropriations
Innovative Technology Loan Guarantee Program - $6

Goal: Provide loan guarantees for renewable technologies
and transmission technologies. This is expected to leverage
an additional $60B in loan guarantees for renewable
transmission connections

Allocation: Competitive Grant

Others – DOE Appropriations
Bonneville Power Administration and Western Area
Power Administration

ARRA provides $3.25 billion in new borrowing authority for
the BPA and $3.25 billion for the WAPA

Goal : To support transmission system planning, operations, and

Allocation: Loans administered by DOE

Others – DOE Appropriations
Carbon Sequestration - $1.52 billion

Goal: For industrial carbon capture (Demonstration
Program of capture carbon dioxide (CO2) from a range
of industrial sources) and energy efficiency
Improvement projects.
    •  $1.0 billion would be available for fossil energy R&D programs.

Allocation: Competitive solicitation from DOE

Others – DOE Appropriations
State Energy Program (SEP) and Decoupling
Program - $3.1 Billion

Goal (SEP): SEP provides grants to states and directs funding to state energy
Offices. The states design and carry out their own renewable energy and
energy efficiency programs.
Goal (Decoupling): The decoupling problem involves efforts to encourage
utilities to promote customer use of energy efficiency measures.

Allocation: SEP funding goes to state energy offices in all states and U.S.
territories. Projects are managed by state energy offices, not by DOE.

Note: allocation of nearly all of this funding appears to depend on
whether or not states adopt utility rate “decoupling” and new building

Housing and Urban Development (HUD)
I. Public Housing Capital Fund - $ 1 billion
Goal: For “priority investments,” including investments that
leverage private sector funding or financing for renovations
and energy conservation retrofit investments. Directed
toward public housing programs – including new construction

Allocation: Awarded competitively by HUD to States

HUD Appropriations
II. Native American Housing Block Grants - $255 million

Goal: For new construction, acquisition, rehabilitation, and
infrastructure development to improve energy efficiency
and conservation.

Allocation: Awarded to tribes using the existing formula.

Note: This is a traditionally underserved constituency

HUD Appropriations
III. Energy Retrofit and Green Investments (Assisted
Housing Stability) - $250 million for grants or loans
for energy retrofit and “green” investments

Goal: For multi-family housing properties owned by private
landlords which serve low-income tenants and receive rental
assistance payments from HUD.

Allocation: Public housing authorities are eligible to apply
through a competitive bid process

Department of Education (DOED) Appropriations
ARRA provides $48.32 billion for state allocations
Energy projects receive 18.2% of the State’s allocation (roughly $10 billion)

Goal: For modernization, renovation, or repair of public
school facilities and institutions of higher education
facilities, including modernization, renovation, and repairs
that are consistent with a recognized green building rating

Allocation: Determined by State Agenda

Department of Defense (DOD) Appropriations
Energy Efficiency Technology Demonstrations and
Research - $300 million

Goal: For improvements in energy generation and
efficiency, transmission, regulation, storage, and
research and development of energy from fuel
cells, wind, solar, and other renewable energy
sources to include bio-fuels and bio-energy
Allocation: For use on military installations

EPA Clean and Drinking
Water State Revolving Funds
ARRA provides $4.0 billion for the Clean Water State Revolving
Funds and $2.0 billion for the Drinking Water State Revolving Funds.
Goal: States are required to use at least 20% ($1.2 billion)
of each Revolving Fund for projects that address:
•  Green infrastructure
•  Water and/or energy efficiency
•  Innovative water quality improvements
•  Decentralized wastewater treatment
•  Storm water runoff mitigation
•  Water conservation

Allocation: Discretion of State EPA

Tax Credits
ARRA estimates $21.6 billion in energy tax incentives
The major reason for this segment of the tax credit is
because previous tax credits are now worthless due to the
economic collapse, so these are new realms of investment/
production tax credits and grants in order to stimulate the

Overview of Tax Credits:
I.  Renewable Energy Tax Credits
II.  Energy Efficient Appliance Rebate Program Energy Star Program
III.  Clean Renewable Energy Bonds
IV.  Alternative Vehicle Fossil Fuels Credit
V.  Energy Conservation Bonds
VI.  Plug-In Vehicle Tax Credit
VII. Alternative Vehicles Tax Credit
VIII. Advanced Battery Manufacturing Grants
Tax Credits
I. Renewable Energy

a. Production Tax Credit (PTC) - $13.1 billion over 10 years
b. Investment Tax Credit (ITC) – (in replacement of PTC’s)
allow PTC-eligible to choose 30% investment tax credit (ITC) in
place of the production credit. (estimated cost $285 million over 10
years). For projects in place in 2009 – 2010.

Tax Credits
II. Energy Efficient Appliance Rebate program
and Energy Star program - $300 million

This funding will provide rebates for residential consumers for the
purchase of residential Energy Star products to replace used
appliances with more efficient models.

Tax Credits
III. Clean Renewable Energy Bonds -$1.6 billion
(for Non-Profit Entities)
Goal: To finance facilities that generate electricity from wind,
closed-loop biomass, open-loop biomass, geothermal, small
irrigation, hydropower, landfill gas, marine renewable, and
municipal waste (trash) combustion facilities.
Allocation: Of the $1.6 billion:
•  one-third would be available to state/local/ tribal governments
•  one-third to public power providers
•  one-third to electric cooperatives

Tax Credits
IV. Alternative Vehicle an Fuels Tax Credit

Goal: Tax credits for the installation of retail and
residential alternative Fuel refueling systems. Eligible
fuels include ethanol, natural gas, liquefied Petroleum
gas, and hydrogen. Capped at $1,000 for residential

Tax Credits
V. Energy Conservation Bonds -an initial $800 million
Goal: State and local governments can issue the bonds for a
broad range of purposes that include:
•  Capital expenditures to reduce energy use in publicly owned
   buildings by at least 20%
•  Implementing green community programs
•  Rural development involving electricity production from
•  Research facilities and grants for the development of cellulosic
   ethanol or other nonfossil fuels
•  Technologies to capture and sequester carbon dioxide
   produced by fossil fuel use
•  Increasing the efficiency of technologies for producing nonfossil
Tax Credits
VI. Plug-In Vehicle Tax Credit

Goal: The credit is based on the battery capacity of the
vehicle, and is capped at $7,500 for light-duty vehicles
and up to $15,000 for the heaviest vehicles.

Tax Credits
VII. Alternative Fueled Vehicles Pilot Grant Program –
$300 million

Goal: The Department of Energy will administer these
grants on a Competitive basis through its Clean Cities
Program to state and Local governments

Tax Credits
VIII. Advanced Battery Manufacturing grants – $2 billion

Goal: Domestic manufacturing facilities are eligible for
this funding.
Allocation: DOE will disburse this funding through
competitive grants to support the manufacturing of
advanced vehicle batteries and components.

The American Recovery & Reinvestment Act


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