Energy Conservation Tax Credits - Competitively-Selected Projects (Personal)

Summary

The Oregon Department of Energy (ODOE) periodically releases Opportunity Announcements for tax credits for energy conservation projects.  Check ODOE's website for announcements and complete information.  

Energy conservation projects include projects with investments for which the first year energy savings yields a simple payback period of greater than three years. Categories for solicitations include: Commercial Buildings; Renewable Thermal; Commercial, Agricultural and Industrial Processes; and Combined Heat and Power. Projects must intend to begin construction within 12 months of the award. Tax credits are worth up to 35% of the project costs. The tax credit is claimed over five years, with 10% of the project costs claimed in the first two years and 5% claimed in the following three years. An applicant may claim the entire credit in the first year if the project costs are less than $20,000, or may request a credit of less than 35% in order to receive more points towards the competitive review criteria. 

Qualifying project costs include: 

• Project components
• Fees to design or engineer the project
• Title searches, escrow fees, permits, licenses
• Materials and supplies needed for erection, construction, installation and acquisition of the project
• Work performed by employees or contractors that meet certain requirements
• Certain legal fees related to the development of the project

Interested parties must submit a preliminary certification application. Projects that are determined to meet all qualifications and deadlines will be reviewed as part of a competitive process. Preference is given to those projects that have the highest energy savings over the five-year credit allowance period per tax credit dollar. Other review criteria may include:

• The amount of energy saved over the equipment lifetime
• The project's expected lifespan compared to simple payback period
• The incentive structure and whether the energy savings benefit a party other than the owner
• Benefit-to-cost ratio over the lifetime of the project
• The project implementation plan
• The project financial plan
• Jobs created and sustained
• Local economic conditions of the site location
• Agreement to accept a reduction to the requested tax incentive
• Agreement to a voluntary measurement and verification plan 

Projects that advance beyond the competitive process must undergo a technical review before receiving final certification. ODOE may require a performance agreement as part of the final tax certification, and projects with over $1 million in funding may be required to annually recertify the tax credit. Check the program web site for Opportunity Announcements and associated application materials and requirements.

Under the Energy Incentives Program, tax credits may be transferred to a pass-through entity. The specific rules that govern that process may be found in the administrative rules or in the relevant opportunity announcement. Current rulemakings and recent revisions to the program may be found here.