Clean Energy Tax Credit (Personal)

NOTE: Due to a high level of interest, the Clean Energy Tax Credit annual funding of $5 million for years 2012, 2013 and 2014 has been fully allocated to compensate applicants wait listed from previous years. The Georgia Environmental Finance Authority is continuing to accept and process applications. If denied by the Georgia Department of Revenue, these applications will be added to a waiting list, prioritized by postmark, for possible credit allocation in a future year.

 

In May 2008, Georgia enacted legislation establishing personal and corporate tax credits for clean energy equipment installed and placed into service. For clean energy property installed for single-family residential purposes, the tax credit is equal to 35% of the cost of the system (including installation). The credit is subject to various ceilings depending on the type of system.

The following credit limits for various technologies and sectors apply:

Leased systems are eligible for the credit. (In the case of a leased system, the cost is considered to be eight times the net annual rental rate, which is the annual rental rate paid by the taxpayer less any annual rental rate received by the taxpayer from sub-rentals.)

Before claiming the credit, the taxpayer must submit an application to the Georgia Department of Revenue for tentative approval, as the aggregate amount of tax credits -- both personal and corporate credits -- taken may not exceed $2,500,000 in any calendar year through December 31, 2011. The aggregate annual limit in 2012, 2013 and 2014 is $5 million. Tax credits are granted on a first-come, first-served basis and may not exceed the taxpayer's liability for that taxable year. Taxpayers who do not receive a full credit for an eligible system will be placed on a "priority list" for access to this credit in future years.

 

The credit must be taken for the taxable year in which the property is installed. For credits allowed through the end of 2011, any excess credit may be carried forward for five years from the close of the taxable year in which the clean energy property was installed. Credits allowed for 2012, 2013 or 2014 must be taken in four equal installments over four successive taxable years beginning with the taxable year in which the credit is allowed.

Solar hot water systems must be certified for performance by the Solar Rating Certification Corporation (SRCC), the Florida Solar Energy Center (FSEC) or a comparable entity approved by the tax authority. The equipment must meet the certification standards of SRCC OG-100 or FSEC-GO-80 for solar thermal collectors and/or SRCC OG-300 or FSEC-GP-5-80 for solar thermal residential systems.

This tax credit took effect July 1, 2008, and is scheduled to expire December 31, 2014.