Alternative Energy Development Incentive (Personal)

Summary

The Alternative Energy Development Incentive (AEDI) is a post-performance non-refundable tax credit for 75% of new state tax revenues (including, state, corporate, sales, and withholding taxes) over the life of the project, or 20 years, whichever is less. The actual amount and duration of an incentive is determined by the Office of Energy Development (OED) on a case-by-case basis.

Eligible projects include the construction of electricity generation facilities of 2 megawatts or greater that utilize hydroelectric, solar, biomass, geothermal, wind, or waste heat from an industrial facility or a power station in which an electric generator is driven through a process in which water is heated, turns into steam, and spins a steam turbine. It also includes energy derived from the following non-renewable energy sources: nuclear fuel, oil-impregnated diatomaceous earth, oil sands, oil shale, or petroleum coke. To qualify for an incentive, the project must generate new state revenue and new incremental jobs, and it must involve significant capital investment, or the creation of high paying jobs.

To receive a tax credit, projects owners must first apply to the OED for a tax credit certificate and provide all the documents specified in Utah Code 79-6-504. If the OED approves the application and issues a tax credit certificate, it will issue a duplicate copy to the state Tax Commission. To maintain eligibility for the tax credit, the project owners must:

• Annually file a report with the OED showing the new state revenues generated by the alternative energy project during the taxable year for which they are seeking to receive a tax credit
• Annually file a report with the OED prepared by an independent certified public accountant verifying the new state revenue
• File a report with the OED at least every four years prepared by an independent auditor, auditing the new state revenues
• Provide the OED with any information required by the OED to certify the economic life of the alternative energy project, which may include a power purchase agreement, a lease, or a permit; and
• Retain records supporting a claim for a tax credit for at least four years