Renewable Energy Tax Credit

Summary

Note: This credit expired on December 31, 2014, and is not allowed for devices installed on or after January 1, 2015. However, wind energy systems whose construction began prior to January 1, 2015 and were completed by January 1, 2017 are eligible for this credit.

North Dakota offers a corporate income tax credit for the cost of acquiring and installing a geothermal, solar, biomass, or wind energy system in a building or on a property owned or leased by a North Dakota taxpayer. For systems installed after December 31, 2000, and before January 1, 2015, the credit is equal to 3% per year for five years of the actual cost of acquisition and installation of the system. Wind energy systems for which construction commenced prior to January 1, 2015 and are completed before January 1, 2017 are eligible for this tax credit.

The installation costs do not include costs of redesigning, remodeling, or otherwise altering the structure of a building in which the renewable energy system is installed. If an eligible renewable energy system is a part of a system that uses other means of energy, only the portion of the cost directly attributable to the renewable energy system is included in determining the credit amount.

In general, if the amount of credit exceeds the taxpayer’s income tax liability, the excess may be carried over to each of the five succeeding taxable years. However, any excess credit earned for wind energy systems installed after September 30, 2008, and before January 1, 2012, may be carried over to each of the twenty succeeding taxable years. For geothermal, solar, or biomass systems installed after September 30, 2008, and wind energy devices installed after December 31, 2011, any excess may be used as a credit carryover to each of the ten succeeding taxable years.

A pass-through entity that installs an eligible system in or on a property it owns or leases is considered to be the taxpayer. The amount of the credit allowed with respect to the entity's investments is determined at the pass-through entity level and must be passed through to the corporate partners, shareholders, or members proportionally.

For eligible systems installed after December 31, 2006, if system ownership is transferred at the time installation is complete and the system is fully operational, the purchaser of the device is eligible for the tax credit under this section. Subsequent purchasers of the device are not eligible for the credit.