(Oregon) Residential Energy Tax Credit
Homeowners, renters and third-party owners who pay Oregon income taxes are eligible for the Residential Energy Tax Credit if they purchase premium-efficiency heating systems, duct systems, premium efficiency biomass combustion devices, closed-loop geothermal space or water heating systems, solar water and space heating systems, photovoltaic systems, wind systems and fuel cells. Third-party owned systems are eligible for the tax credit, though specific requirements detailed in the administrative rules must be met.
Renewable Energy Incentives
Photovoltaic (PV) systems are eligible for $2.10 per peak watt (W) with a maximum limit of $6,000, up to 50% of the net cost. The net cost is calculated after taking any state incentives. However, the amount claimed in any one tax year may not exceed $1,500 or the taxpayer’s tax liability, whichever is less. Unused credits may be carried forward for five years. As of January 1, 2011, residents that are leasing a solar system are also eligible for the tax credit.
Solar space and water heating systems, and wind-powered mechanical systems are eligible for a credit of $0.60 per kilowatt-hour (kWh) saved during the first year, up to $1,500.
Fuel cells are eligible for a credit of $0.60 per kilowatt-hour (kWh) saved during the first year, up to $6,000 or 50% of total costs.
Spa and pool heating systems are eligible for a tax credit of 15 cents per kWh saved, up to 50% of the cost, with a maximum tax credit of $1,500.
Closed-loop geothermal systems for space or water heating are eligible for a $300 to $900 tax credit.
Premium efficiency biomass combustion devices are eligible and are capped at $300 or 25% of the cost.
Wind turbine systems that produce electricity are eligible for a credit equal to the lesser of $2 per kWh produced during the first year, or $6,000. The incentive is based on actual system production. Wind systems must meet specific requirements for minimum production, tower height, and wind speed, among other requirements. Systems must produce an average of 100 kWh per month, at a minimum, towers must be a minimum of 70 feet, and systems must have a minimum annual average wind speed of 10 miles per hour at hub height.
Energy Efficiency Incentives
Only technologies recognized as premium efficiency by the Oregon Department of Energy are eligible for the tax credit. The Oregon Department of Energy maintains a list of qualifying technologies. The tax credit is the lesser of: (1) $0.40 per kWh saved in the first year, or (2) 25% of the net cost of the appliance.
Performance-tested duct systems qualify for a tax credit for 25% of the cost of the work, not to exceed $250. The testing must be performed by a contractor certified by the Oregon Department of Energy.
Qualifying air-source heat pump systems are eligible for a tax credit of $300 to $430 when installed by a contractor on the Oregon Department of Energy’s certified contractor list.
Qualifying gas furnaces are eligible for a tax credit of $350. If the heat pumps and furnaces are connected to a performance-tested duct system, they are eligible for an additional $150 tax credit.
Heat pump water heaters must the Northern Tier specification established by the Northwest Energy Efficiency Alliance in order to qualify for the tax credit.
Previously, this credit was scheduled to expire in 2012, but HB 3672 (2011) extended the expiration date of the tax credit to January 1, 2018, with the exception of the alternative fuels vehicle portion of the tax credit which will sunset as scheduled January 1, 2012. Previously, RETC offered incentives for appliances such as dishwashers, clothes washers, refrigerators, plus air conditioners and boilers. However, HB 3672 excluded these technologies as of January 1, 2012. In the past, alternative fuel vehicles and charging or fueling systems were eligible to receive the tax credit, but this eligibility expired January 1, 2012.
|Incentive Type:||Personal Tax Credit|
|Eligible Efficiency Technologies:||Water Heaters, Furnaces , Heat pumps, Heat recovery, Duct/Air sealing, Pool Pumps, Tankless Water Heaters, Heat Pump Water Heaters|
|Eligible Renewable/Other Technologies:||Passive Solar Space Heat, Solar Water Heat, Solar Space Heat, Photovoltaics, Wind, Biomass, Fuel Cells, Geothermal Heat Pumps, Solar Pool Heating, Fuel Cells using Renewable Fuels|
|Amount:||PV: $2.10/W-DC at STC
Wind Electric Systems: $2/kWh produced in first year
Spa/pool heating: $0.15/kWh saved
Water Heating: $0.40/kWh saved, with a maximum of 25% of net purchase price
Premium Efficiency Biomass Combustion Device: $0.40/kWh saved in first year, $300 or 25% of the cost, whichever is less
All other renewable technologies: $0.60/kWh saved during the first year.
|Maximum Incentive:||Energy efficient heating and water heating systems: $1,000 per calendar year
Premium Efficiency Biomass Combustion Device: $300 or 25%, whichever is less
For all others (excluding PV, Fuel Cells and Wind Turbines): $1,500, up to 50% of installed cost
PV, Fuel Cells and Wind Turbines: $6,000 ($1,500 per year for 4 years), up to 50% of net cost.
|Equipment Requirements:||Must carry manufacturer’s warranty; must comply with general and specific standards in OAR 330, Division 70.|
|Installation Requirements:||Must obtain certification from Oregon Dept. of Energy prior to installation or be installed by contractor certified by the Department.|
|Carryover Provisions:||Excess credit may be carried forward five years following the first tax year for which any credit was allowed (must be taken over no more than 6 years altogether).|
|OAR 330-070-0010 to 330-070-0097
1977, subsequently amended
|ORS § 469.185 et seq.