U.S. Department of Energy Energy Efficiency and Renewable Energy

Ask an Expert

July 30, 2012
Q.

I am looking of examples of how local units of government have utilized state/federal governmental tax credits to reduce the cost of PV/solar electric systems.  I know there is a way with vehicle fueling alternatives, but I am searching for how tax credits can make our dollars go further with PV.

A.

There are a few ways that local governments can utilize federal and state tax credits for PV. Generally, local governments cannot directly use tax credits as they are not taxpaying entities. A 3rd party power purchase agreement is commonly used so that tax benefits can be used when a system is installed on a local government. There are also other ownership structures you might be able to use — but you would have to talk to a tax attorney about those. Some states allow non-profits or government entities to take advantage of tax credits directly or by passing through benefits to an outside party. There's state-by-state information on this in the DSIRE Solar Policy Comparison Tables.

Ask an Expert

Use the Ask the Expert section to suggest a feature article, pose a technical question to a solar expert, or share your input to improve the site.