Oregon’s Business Energy Tax Credit Program

This entry was posted by on Saturday, 15 May, 2010 at

Oregon offers tax credits for many businesses that invest in renewable energy as well as reductions in their overall energy usage. Although this program is subject to cutbacks because of overall economic conditions, it still provides many benefits for businesses that reduce their energy usage and carbon emissions.

The program provides benefits in several areas, according to the State of Oregon. A major area is conservation, and the program allows tax credits for business owners who set up projects that conserve resources such as water and electricity through improvements to the air conditioning and irrigation systems at their companies. Qualification for this project does involve the business owner submitting an application to the State of Oregon and explaining why their project is eligible for tax benefits. The project has to be at least ten percent more energy efficient than the typical systems which other companies install.

The Oregon tax credit is a percentage of installment costs, not the full installment cost. At a thirty five percent rate, it does provide a significant reduction in construction costs, and does create an economic stimulus effect. Oregon requires a relatively short payback period, less than fifteen years. This is short because large improvements may be designed to last decades, and if a project lasts for fifty years, demand may be high enough that the cost will not allow payback in fifty years. Payback periods are affected by overall energy costs, so even if a new refrigerator or air conditioning system does not appear to have a payback period of less than fifteen years now, it might when gas prices sharply jump during a crisis in the future. You’ll still have to make the calculation with reasonable numbers now when sending in the tax credit application, to get the approval of the Oregon auditors.

This project is now scaled back, not just because of the economy, but because of widespread fraud. According to Oregon Live, the previous regulations allowed businesses to collect money from the state of Oregon without providing any energy saving benefits. The new compromise bill allows wind power generators to still receive tax credits for building new turbines and wind farms, and reduces abuses such as dividing up the wind farms to receive greater amounts of Oregon taxpayer money. A clawback provision allows Oregon to reclaim subsidies on projects that do not continually meet energy efficiency standards. The government agency, DSIRE, offers a very long list of the types of projects eligible for Oregon energy efficiency grants, including local grants such as cities and counties that subsidize solar, wind power, and other renewable energy.

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