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Introduction > Current Materials > 8. Energy Efficiency Incentives

8. Energy Efficiency Incentives

105490-1 : n : 12/30/2008 : LFO-KF / DJ

SYNOPSIS:         This bill would establish income tax credits for the installation of energy efficiency equipment in residences or commercial property up to a maximum of $500 for residences and $1,000 for commercial property for an individual taxpayer.

 

A BILL

TO BE ENTITLED

AN ACT

 

To establish income tax credits for the installation of certain energy efficiency equipment in residences or commercial property up to a maximum of $500 for residences and $1,000 for commercial property for an individual taxpayer.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. This act shall be known as the Energy Efficiency Act of 2009.

Section 2. Legislative Findings. The Legislature finds that the installation of energy efficiency equipment in a primary residence or existing commercial property is recommended for the following reasons:

(1) To stimulate the use of efficient energy technology and help to create sales tax revenues with the investment in energy efficient technology in Alabama.

(2) To reduce air and water pollution from energy production and consumption that is affecting the health of the residents of Alabama.

(3) To moderate future electric demand.

(4) To assure the reliability of the electric grid and an adequate supply of natural gas and other primary energy sources.

(5) To control energy expenditures of residencies and commercial property in Alabama.

(6) To moderate the emission of gases that contribute to global warming.

Section 3. The following definitions shall apply to this act.

(1) “Active solar space-heating system” means a system that:

a. Consists of solar energy collectors that gather and absorb solar radiation combined with fans or pumps and associated ducts and pipes to transfer and distribute that collected energy.

b. May include energy storage systems to provide heat when the sun is not shining.

c. Is installed by a certified installer.

(2) “Certified Installer” means one who has been certified by the North American Board of Certified Energy Practitioners (NABCEP) as a Certified Solar PV Installer or a NABCEP Certified Solar Thermal Installer.

(3) “Passive Solar Space-Heating System” means a system that:

a. Takes advantage of the warmth of the sun through the use of design features such as large south-facing windows and materials in the floors and walls that absorb warmth during the day and release that warmth at night.

b. Includes one or more of the following designs:

1. Direct gain which stores and slowly releases thermal energy collected from the sun shining directly into a building warming materials such as tile or concrete.

2. Indirect gain using materials that are located between the sun and the living space such as a wall to store and release thermal energy.

3. Or isolated gain which collects warmer air from a remote area such as a sun room attached to a house and the warmer air flows naturally to the rest of the house.

(4) “Solar Water-Heating System” means a system that:

a. Gathers and absorbs solar radiation to heat water.

b. Is an indirect pressurized glycol system using propylene glycol or is an indirect drain-back system.

c. Uses solar thermal collectors that are certified by the Solar Rating and Certification Corporation and covered by manufacturer’s warranty for not less than five (5) years.

d. Is installed by a certified installer and warranted by the installer for not less than two (2) years.

(5) “Qualified Energy Property” means the following property that meets the performance, quality, and certification standards to be eligible for the federal tax credit for residential energy property expenditures under 26 U.S.C. sec 25C, as it existed on December 31, 2007:

a. An electric heat-pump water heater.

b. An electric heat pump.

c. A geothermal heat pump.

d. A natural gas propane or oil furnace or hot water heater.

e. A central air conditioner.

(6) “Energy Efficient Windows and Storm Doors” means windows and storm doors that are ENERGY STAR labeled.

(7) “Insulation Upgrades” means insulation with the following R-value ratings: attic R-38 or higher; exterior wall and crawl space R-13 or higher; and floor R-19 or higher.

(8) “Energy Efficient Lighting” means and interior lighting system that meets the reduction in lighting power density requirements for the federal energy efficiency commercial building deduction under 26 U.S.C. sec 179D as in effect December 31, 2007.

(9) "Energy Efficient Heating, Cooling, Ventilation, or Hot Water system” means a system that meets the requirements for the federal energy-efficient commercial building deduction under 26 U.S.C. sec 179D as in effect December 31, 2007.

(10) “Installed Cost” means the following less any discounts, rebates, sales tax, installation-assistant credits, name referral allowances, or similar reduction:

a. The purchase cost of equipment, components, and associated design.

b. Labor costs properly allocable to the on-site preparation, assembly, and original installation of the property, including piping and wiring to interconnect such property to the residence or commercial property.

Section 4. For the taxable periods beginning after December 31, 2008, and before January 1, 2016, there is hereby created a nonrefundable credit against Alabama income tax. The credit shall apply if one (1) or more of the items listed below is installed during the tax year in the primary residence of the taxpayer in the state of Alabama.

(1) Income tax credits up to $500 for installation of the following in an existing dwelling that is the primary residence of the taxpayer.

a. Active solar space-heating system.

b. Passive solar space-heating system.

c. Solar water-heating system.

(2) Income tax credits up to $500 for installation of “qualified energy property” in an existing dwelling that is the primary residence of the taxpayer.

a. An electric heat pump water heater.

b. An electric heat pump.

c. A geothermal heat pump.

d. A natural gas, propane or oil furnace or water heater.

e. A central air conditioner.

(3) Income tax credits up to $500 for insulation upgrades to an existing dwelling that is the primary residence of the taxpayer

(4) Income tax credits up to $500 for the installation of energy efficient lighting systems, programmable thermostats, and/or technology that reduces “reserve power or standby power” with demand response technology in an existing primary residence of the taxpayer.

(5) The limit of the total credit per taxpayer for a primary residence is $500.

Section 5. For the taxable periods beginning after December 31, 2008, and before January 1, 2016, there is hereby created a nonrefundable credit against Alabama income tax. The credit shall apply if one (1) or more of the items listed below is installed during the tax year in property located in the state of Alabama that is owned and used by the taxpayer as commercial property:

(1) Income tax credit up to $1,000 for the installation of energy efficient lighting systems in an existing commercial building.

(2) Income tax credit up to $1,000 for the installation of an energy efficient heating, cooling, ventilation, or hot water heater in an existing commercial building.

(3) The limit of the total credit per taxpayer for commercial property is $1,000.

Section 6. All laws or parts of laws which conflict with this act are repealed.

Section 7. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.