Green Industry Recruitment Incentives

Arkansas

Advanced Biofuels Tax Credit

This industrial recruitment incentive provides a 30% credit for the cost of buildings, equipment, and intellectual property necessary to produce advanced biofuels (ethanol or methanol and/or their derivatives, produced from biomass – waste materials).
See AR Code § 2-8-109; Acts 1999 No. 1367.

Emerging Energy Technology Development Credit

The Arkansas Emerging Energy Technology Development Act of 1999, as amended in 2001, provides for an economic incentive to attract manufacturers of high-tech/high-growth energy technologies, which are on the verge of full entry into the worldwide market. The intent of this act is to provide an environment that creates diverse economic opportunities for Arkansas and expands the state’s ability to attract higher paying jobs as well as enhancing recruitment, training, and retention of a talented Arkansas workforce.

The act established a state income tax credit of 50% of the amount to purchase or construct a facility that designs, develops, or produces photovoltaics (solar cells), electric vehicle components, fuel cells, microturbines, Stirling engines, or devices that are reliant on nanotechnology. The cost can include land, infrastructure, renovation, building improvements, and machinery. Any portion of the unclaimed tax credit may be carried forward for a maximum of 14 years.

See AR Code 15-4-2101; Act 976 of 1999 and Act 1284 of 2001.

Massachusetts

Alternative Energy and Energy Conservation Patent Exemption (Corporate)

Any Massachusetts resident who has applied for, or holds a patent for, an alternative energy or energy conservation system or device, may petition the Commissioner of Energy Resources for determination that such patent is “…of economic value, practicable, and necessary for the convenience and welfare of the Commonwealth.” If the Commissioner approves such a patent, any income received from the sale, lease, or other transfer of such patent, including royalty income, and any sale, lease, or other transfer of property or materials manufactured in the Commonwealth subject to such patent, is exempt from state personal income tax or business excise tax. The exemption is valid for five years from the date of issuance of the patent or approval by the Commissioner of Energy Resources, whichever expires first.

See General Laws of Massachusetts c.62, sec. 2(a)(2)(G).

Minnesota

Renewable Energy Production Incentive

Minnesota offers a payment of 1.5 cents per kilowatt-hour for electricity generated by hydro facilities and on-farm anaerobic manure methane digesters. This incentive is available to hydro facilities located at the site of a dam, if the dam was in existence as of March 31, 1994; and begins generating electricity after July 1, 1994, or generates electricity after substantial refurbishing of a facility that begins after July 1, 2001. Anaerobic digesters placed in operation after July 1, 2001, are also eligible. Qualifying projects receive payments for 10 years.

This program is unique because it offers payments for actual energy output. The advantage of a production incentive program is that production payments and credits place a premium on project output as opposed to rated capacity, which may or may not be fully utilized once installed. This is one of the few state-level, performance-based renewable energy incentives offered in the United States.

See Minnesota Statutes § 216C.41.

Texas

Solar Energy System Manufacturer Franchise Tax Exemption

For solar equipment manufacturers, Texas’ code states that “[a] corporation engaged solely in the business of manufacturing, selling, or installing solar energy devices… is exempted from the franchise tax.” The franchise tax is Texas’ equivalent to a business tax; their primary elements are the same. There is no ceiling on this exemption and thus is a substantial incentive for solar manufacturers. This is the only such blanket exemption of its kind for solar manufacturers. Only Nevada makes a similar sort of exemption with a 75% property tax exemption – for all property – for producers of renewable energy.

See Texas Statutes § 171.056.

Virginia

Solar Manufacturing Incentive Grant Program (SMIG)

Perhaps the most widely publicized industrial recruitment program in the renewable energy industry is Virginia’s Solar Manufacturing Incentive Grant (SMIG) Program. Created in 1995 and administered jointly by the Virginia Department of Mines, Minerals, and Energy and the Virginia Economic Development Partnership, this fund makes available up to $4.5 million per year through 2007 for the manufacture of photovoltaic panels in Virginia. The incentive is paid at a rate of up to 75 cents per watt for panels sold in a calendar year, up to six megawatts. Companies receive benefits for a maximum of five years.

Since January 1, 2002, new manufacturers that meet certain expansion thresholds have been eligible to receive annual incentive grants for six years. The amount is awarded as follows:

• Years 1 and 2 - $0.75/watt
• Years 3 and 4 - $0.50/watt
• Years 5 and 6 - $0.25/watt

Two companies have located photovoltaic plants in Virginia since the program’s inception in 1995. The first company to site a plant in Virginia as a result of this program was Solar Building Systems, Inc., an affiliate of Atlantis Energie of Bern, Switzerland, which began manufacturing modules in 1995. Solar Building Systems reorganized in 2001 and is now Atlantis Energy. The second company to take advantage of the SMIG Program was BP Solar. However, BP Solar’s manufacturing facility closed in 2002.

See Va. Code § 58.1-3661.