| Business Energy Tax Credits |
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Protecting Oregon´s environment is part of our mission. That´s why the Oregon Department of Energy offers the Business Energy Tax Credit to those who invest in energy conservation, recycling, renewable energy resources and less-polluting transportation fuels.
WHAT TYPE OF PROJECTS QUALIFY?
The department accepts applications in three main categories. Follow these links for more information:
Renewable Resources
Energy Conservation
Renewable Energy Resource Equipment Manufacturing
HOW MUCH IS THE TAX CREDIT?
Tax credit amounts vary by the type of project completed.
The tax credit is 50 percent of the eligible project costs for:
- High Efficiency Combined Heat and Power
- Renewable Energy Resource Generation
- Renewable Energy Resource Equipment Manufacturing Facilities
The tax credit is generally taken over five years at 10 percent per year.
The tax credit is limited for:
- Homebuilder Installed Renewable Energy Facilities - up to $9,000
- High Performance Home - up to $12,000
For all other projects:
Tax credit is 35 percent of eligible project costs (the incremental cost of the system or equipment that is beyond standard practice). You take the credit over five years: 10 percent in the first and second years and 5 percent each year thereafter.
If you can’t take the full tax credit each year, you can carry the unused credit forward up to eight years. Those with eligible project costs of $20,000 or less may take the tax credit in one year.
WHO CAN GET A TAX CREDIT?
Trade, business or rental property owners who pay taxes for a business site in Oregon are eligible for the tax credit. The business, its partners or its shareholders may use the credit. The applicant must own or be the contract buyer of the project (the project owner). The business must use the equipment for the project or lease it for use at another site in Oregon.
A project owner also can be an Oregon non-profit organization, tribe or public entity that partners with an Oregon business or resident who has an Oregon tax liability. This can be done using the Pass-through Option.
PASS-THROUGH OPTION
The Pass-through Option allows a project owner to transfer their Business Energy Tax Credit project eligibility to a pass-through partner for a lump-sum cash payment. A project owner may be a public entity or non-profit organization with no tax liability or a business with tax liability that chooses to use the Pass-through Option. There may be tax implications when using the Pass-through Option. Please consult with your tax preparer.
WHAT COSTS ARE ELIGIBLE?
The tax credit can cover all costs directly related to the project, including equipment cost, engineering and design fees, materials, supplies and installation costs. Loan fees and permit costs also may be claimed. Replacing equipment at the end of its useful life and equipment required to meet codes or other government regulations are not eligible. Maintenance costs are not eligible. Applicants should check application forms for eligible costs for Renewable Energy Resource Equipment Manufacturing Facilities, Homebuilder Installed Renewable Energy Resource Facilities and High Performance Homes. Please read Documentation for more information.
HOW DO I APPLY FOR THE TAX CREDIT?
You must apply for the tax credit BEFORE starting your project or making a financial committment (e.g. sign a contract, make a down payment, purchase materials,etc.).
Submit the project-specific Application for Preliminary Certification. Your application must be complete and include payment for review charges.
The Oregon Department of Energy will send you a Preliminary Certificate when your application is approved. That is your go-ahead to start the project.
You will also receive additional information on how to apply for the Final Certificate (Final applications in PDF format are linked in the right-hand column). Projects with costs of $50,000 or more are required to have a letter from a certified public accountant (CPA). Click here for a sample CPA letter.
The Oregon Department of Energy performs some follow-up site reviews to verify that equipment has been installed and operates as specified. For more information, see Verification Reviews.
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Oregon Administrative Rules
(temporary rules effective May 27, 2010)
Frequently Asked Questions: Changes in the Business Energy Tax Credit (BETC) Program
BETC Rulemaking Information
Final Application form:
Final Application (PDF)
Application for Final Certification for Pass-through Projects(PDF)
Pass-Through Information
Information for CPAs
Documentation
Governor receives recommendations on Business Energy Tax Credit
Federal Incentives for Energy Efficiency
Economic Impacts of Energy Tax Credit Program
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