Incentives
Clean Renewable Energy Bonds (CREBs)
The Clean Renewable Energy Bond (CREB) program is a new financial incentive created in the Energy Policy Act of 2005. It is available to municipal utilities and electric cooperatives and is intended to promote renewable energy development.
Community Wind Financing Handbook
This guidebook was created by Charles Kubert for the Environmental Law and Policy Center in 2004. It talks about business models, sources of equity, grant and loan programs, incentives, and power purchase agreements for community wind projects. You'll find it online on the ELPC website.
Renewable Portfolio Standard (RPS)/Renewable Electricity Standard (RES)
A minimum renewable energy requirement for a region's electricity mix. Under an RES, electricity suppliers are required to provide some percentage of its supply from renewable energy sources. RPS proposals frequently ease that requirement by including a tradable credit system under which electricity suppliers can meet the requirement by buying and selling renewable energy credits (RECs).
Renewable Energy Credits (RECs)
The “green” or renewable attribute of electricity that is generated utilizing a renewable energy resource. A wind turbine that produces 1 MWh of electricity has produced 1 REC which, in some electricity markets, can be sold separately from the electrical power.
Renewable Energy Production Incentive (REPI)
A federal production payment of 1.5¢ per kWh that is made available to new qualifying renewable energy generation facilities. However, since the REPI involves spending of federal funds, money must be appropriated annually by Congress.
Production Tax Credit (PTC)
Provides the owner of a qualifying facility with an annual tax credit based on the amount of electricity that is generated. By focusing on the energy produced instead of capital invested, this type of tax incentive encourages projects that perform adequately. In 2007, the rate for the PTC is 1.9¢/kWh. The PTC increases from year to year based on the consumer price index.
Passive Tax Appetite
Income from certain types of investments qualifies as passive income. Tax paid on this income is considered passive tax. To take advantage of the Federal Production Tax Credit (the PTC) and Modified Accelerated Cost Recovery System (MACRS), you or a project partner must be paying taxes that fit into this category of tax liability.
