Talking Points

Income tax credits and deductions provide a strong financial incentive for taxpayers to invest in renewable energy and energy-efficient technologies for their homes.

• In most states, income taxes are the largest of the many tax burdens placed on residents.
• Income tax relief rewards those who make energy efficiency and renewable energy a priority, and encourages more environmentally-sound consumption habits.
• By providing financial incentives to those who conserve and use renewable fuels, states can help to affect a longer term shift in environmental consciousness and values.
• Creating a demand for renewable energy technologies through changes in the tax code has the potential to lure manufacturers and suppliers of those technologies to states, creating jobs and improving the economic outlook. Supply meets demand.
• Income tax credits can be based on either the size and amount of money invested in a renewable energy system or the amount of energy produced from a system. However, the cost of measuring production on a small system can be prohibitive.

Credits and deductions against business income taxes or franchise taxes can serve as a valuable incentive for businesses to adopt more environmentally-friendly practices.

• There is no better way to influence business and business activity than to appeal to the bottom line.
• By encouraging investment in renewable energy, or more energy-efficient behavior, tax changes of this sort not only help to improve the quality of our environment and reduce our dependence on dirty fossil fuels, but they also serve to stimulate economic growth in the state.
• Not only may businesses within the state see a marked impact on their bottom line, but businesses outside of the state are sure to take notice of policies that reward businesses for energy-efficient and environmentally-friendly behavior.
• Being among the first states to offer significant business incentives for investment in renewable energy and energy-efficient technologies gives your state a competitive advantage over others who limit their economic development to traditional technologies.
• Business tax credits can be based on either the size and amount of money invested in a renewable energy system or the amount of energy produced from a system.

Sales tax exemptions are a useful tool in promoting renewable energy.

• Sales tax incentives to encourage renewable energy use typically exempt state sales tax for the cost or installation of equipment (or renewable energy systems).
• By reducing or eliminating sales tax on the purchase of renewable energy systems, the relative costs go down, which makes investing in these systems more attractive to consumers who want to make a difference but are still concerned with having to spend a significant amount up front.

Property tax credits and deductions provide a strong financial incentive to businesses and individuals to invest in renewable energy systems and energy efficiency improvements.

• Because many renewable energy systems and energy efficiency improvements can be relatively complex and expensive, the increased value they add to property can have a significant impact on the property owner’s tax bill.
• Property tax exemptions for the value-added associated with energy efficiency improvements or renewable energy systems allow homeowners and businesses to make environmentally-friendly improvements to their home or business without the threat of causing a significant increase in their tax liability.
• The amount of property tax credit can be based on the size and amount of money invested in a system or the amount of energy produced from a system.

Tax incentives for green industry recruitment provide the double benefit of improving our environment while generating jobs and development in the state.

• Green industries are those that produce low or zero emissions as well as those that are dedicated to the manufacturing of energy-efficient products or renewable energy fuels or systems.
• In times of economic distress, like those facing many of the states today, economic growth and development is a top priority. By focusing these efforts on green industry recruitment, states can protect the valuable current and future natural resource values of the state while attracting investment from an industry which is poised to reap substantial economic benefit from the greening of American society.
• Few industries have as much growth potential as renewable energy and energy efficiency industries. States, which invest in this potential early, stand to see a high rate of return in the coming decade.
• Green economic development incentives generally take the form of income or property tax credits and are linked to either the manufacturing capacity of the facilities built or the number of jobs created.