EPAct Tax Refunds Await Many Unsuspecting Commercial Building Owners

EPAct Tax Refunds Await Many Unsuspecting Commercial Building Owners

by Ken Anno, Esq.

Association of Energy Engineers Member #63947
National Lighting Bureau listed Designer & Qualified EPAct Certifier


INTRODUCTION

The 2005 U.S. Energy Policy Act The Energy Policy Act of 2005 (EPAct) was the most significant overhaul of U.S. national energy policy since 1992. The policy’s objective was to reduce the national energy demand by 312 megawatts and carbon emissions by 10 million metric tons. Congress hoped to achieve these lofty goals by targeting commercial building owners by dangling a carrot in the form of $1.1 billion in tax-based incentives over 4 years (2005-2008) for improvements in sustainable building technologies, weatherization and energy efficiency.

The energy-efficient commercial-building property deduction (Section 179D) provides taxpayers with an immediate deduction of up to $1.80 per square foot for the installation of interior lighting, building envelope property, and heating, cooling, ventilation and hot water systems that significantly reduce power use. The cost of this property normally would be depreciated over 39 years. The use of accelerated depreciation techniques (rather than straight-line depreciation) increases the NPV of a project by shifting the cash flows forward in the project’s life thereby increasing present value of these cash flows.

“Energy-efficient property” is defined by EPAct 2005 to be commercial building property that is certified to reduce total annual energy and power costs to at least 50% less than a building satisfying ASHRAE 90.1-2001 Standard. Qualifying systems include 1) interior lighting systems, 2) heating, cooling, ventilation and hot water systems, and 3) building envelope. In addition, the property must 1) be otherwise depreciable property, 2) located in the United States, 3) paid to be constructed by the taxpayer seeking the deduction.

Emergency Economic Stabilization Act of 2008 extended the Section 179 tax deduction for the cost of energy efficient commercial building property placed into service during the taxable year. Under the extension, the property can be placed in service through December 31, 2013. This provision became effective for property placed in service after December 31, 2008 and before January 1, 2014. The 2008 extension further increased the amount of deductible Code Sec. 179 expensing to $250,000 from 125,000 and increased the phase-out threshold from $500,000 (adjusted for inflation) for reducing the deduction to $800,000 for property purchased and placed in service in tax years beginning in 2008. The 2009 Recovery Act further extended the $250,000 and $800,000 amounts to tax years beginning in 2009.

IRS NOTICE 2006-52 AND 2008-40

The IRS released interim guidelines pertaining to the deduction for energy-efficient commercial buildings under Section 179 (D). (See IRS Notice 2006-52, attached hereto as Exhibit A). IRS Notice 2006-52 was amplified by IRS Notice 2008-40, which set forth additional guidance relating to the deduction for energy efficient commercial buildings under Section179 (D) and is intended to be used in conjunction with Notice 2006-52. (See IRS Notice 2008-40, attached hereto as Exhibit B).

THE RETROACTIVE SECTION 179 ELECTION DILEMA

Upon the 2008 extension, confusion has arisen over whether a Section 179 election could be made for qualifying property costs that were incurred over prior years when the tax payer did not know of the available tax deduction. In fact, the informational website www.section179.org specifically states that a taxpayer cannot claim Section 179 for previous tax years. However, this is simply incorrect.

The root of this confusion is that the permanent rule for elections to claim on expense method depreciation for many years has been that elections had to be made on the original income tax return for the year the property was placed in service (whether or not the return was timely) or on an amended return but only if filed within the time for filing a return (including extensions) for the taxable year. For taxable years beginning after 2002 and before 2008, a taxpayer was permitted to make an expense method depreciation election on an amended federal income tax return without the consent of the Commissioner. The amended return had to be filed within the time prescribed for filing an amended return for the taxable year.

The statute has always been clear on the authority to revoke without the Commissioner’s consent:

“Any elections made under this Section, and any specification contained in such election, may not be revoked except with the consent of the Secretary. Any such election or specification with respect to any taxable year beginning after 2002 and before 2011 may be revoked by the taxpayer with respect to any property, and such revocation, once made, shall be irrevocable. §179 (c) (2).

The statute was amended in 2006 to extend the period for revocations to be made on an amended return before 2010, but that legislation did not extend the period for making elections on an amended return. The statute was amended again in 2007 to extend the date to “before 2011” for revocations without the Commissioner’s consent, but again without extending the period for making elections, which has led to confusion on the proper procedure on Section 179 election.

SECTION 179 TAX DEDUCTION CAN BE CLAIMED FOR PRIOR TAX YEARS BY FILING AN AMENDED TAX RETURN

A qualifying taxpayer can claim a tax deduction and refund by filing an amended tax return within 3 years from the date the original return was filed (including extensions) or within 2 years from the date the tax was paid. The IRS clearly authorizes a tax payer to make a Section 179 election for previous tax years as noted in the following IRS publications.

(a) T.D. 9307: The Treasury had made an attempt to resolve the problem as evidenced in T.D. 9307 issued on December 26, 2006, which in revenant part stated:

The final regulations retain the rule contained in the temporary regulations providing that the making of a late depreciation election or the revocation of a timely valid depreciation election is not a change in method of accounting, except as otherwise provided by the Code, the regulations under the Code, or other guidance published in the Internal Revenue Bulletin. A commentator inquired whether a late Section 179 election may be made by requesting a change in method of accounting. Under Section 179 and the regulations under Section 179, a late Section 179 election generally is made by submitting a request for a letter ruling. However, for a taxable year beginning after 2002 and before 2010, a taxpayer may make a Section 179 election by filing an amended return. Accordingly, the IRS and Treasury Department have included a cross-reference to Section 179(c) and §1.179-5.

(See T.D. 9307, December 26, 2006, attached hereto as Exhibit C).

(b) IRS Rev. Proc. 2008-54: Section 7 of IRS Rev. Proc. 2008-54 reiterated this point and expressly stated that the taxpayer could rely on this guidance even without a formal statutory amendment to Section 1.179-5(c).

For any taxable year beginning after 2007 and before the last year provided in § 179(c) (2) for revoking a § 179 election by a taxpayer with respect to any § 179 property, the taxpayer will be permitted to make a § 179 election without the Commissioner’s consent on an amended federal tax return for that taxable year. Currently, the last year provided in § 179(c) (2) is 2011. The Internal Revenue Service and the Treasury Department intend to amend § 1.179-5(c) to incorporate the guidance set forth under this Section 7. Until § 1.179-5(c) is amended, taxpayers may rely on the guidance set forth in this Section 7.

(See IRS Rev. Proc. 2008-54, attached hereto as Exhibit D).

INFO 2009-0059: In INFO 2009-0059 released on March 27, 2009, the Office of Chief Counsel issued an Informational letter that stated that taxpayers can make or revoke an expense method depreciation (Sec. 179) election on an amended return for a taxable year beginning after 2007 and before 2011 without the need for Treasury Regulations to be issued. The IRS noted that taxpayers can rely on the guidance set forth in Rev. Proc. 2008-54, Section 7 for making and revoking such elections.

Section 7 of Rev. Proc. 2008-54 provides that for any taxable year beginning after 2007 and before the last year provided in Section 179(c) (2) for revoking a Section 179 election by a taxpayer with respect to any Section 179 property, the taxpayer will be permitted to make a Section 179 election without the Commissioner’s consent on an amended federal tax return for that taxable year. Further, Section 7 provides that the Internal Revenue Service and the Treasury Department intend to amend Section 1.179-5(c) to incorporate the guidance set forth under Section 7 and that until Section 1.179-5(c) is amended, taxpayers may rely on the guidance set forth in Section 7. See Section 7 of Rev. Proc. 2008-54.

(See INFO 2009-0059, attached hereto as Exhibit E).

CONCLUSION

Based on guidance issued by the IRS, a qualifying taxpayer is permitted to make a Section 179 election without the Commissioner’s consent on an amended federal tax return for a taxable year beginning after 2007 and before 2011 for energy efficient measures that meet the requirements set forth in IRS Notice 2006-52 and IRS Notice 2008-40. The simple translation is that building owners that meet the requirements as set forth above will enjoy additional cash flow in the form of a tax refund for project costs incurred within the past 3 years. To claim an unused 179D refund the taxpayer need only to file a Form 1040 X, “Amended U.S. Individual Income Tax Return.” A claim for a credit or refund must be filed within 3 years from the date the original return was filed (including extensions) or within 2 years from the date the tax was paid, whichever is later. (See Instructions for Form 1040X, Rev. January 2010, attached hereto as Exhibit E). According to Instructions for Form 1040X, the processing time is 8 to 12 weeks.



DISCLAIMER: The materials in this newsletter are offered for informational purposes only and are not legal or tax advice. Do not act or rely upon any of the resources and information contained in this newsletter without seeking professional legal advice from an attorney that you retain. Reproduction, distribution, republication, and/or retransmission of material contained in this Newsletter are prohibited unless the prior written permission of the Author and Kuma Energy Solutions has been obtained.

Illinois EnergyStar Rebate - 9/24/2010

Rebates will be made available for eligible clothes washers, dishwashers, freezers and refrigerators on September 24, 2010. Previously, rebates for eligible clothes washers, dishwashers, room air conditioners, refrigerators, and freezers began on April 16, 2010, and closed at 7 p.m. the same day when rebate funds were exhausted. Earlier rebates for heating, central air conditioning, and water heaters began January 31, 2010; the rebates for water heaters ended on February 21, 2010 and the rebates for heating and ventilation products ended on April 5, 2010. Confirm funding and requirements at www.illinoisenergy.org/appliances

Naperville Endorses Smart Grid

Media Release Friday, December 11, 2009

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Naperville City Council Endorses Smart Grid Initiative

NAPERVILLE, Ill.— At its December 7, 2009, workshop, the Naperville City Council endorsed Naperville’s Smart Grid Initiative and committed financial support for the city to match an approximate $11 million grant from the U.S. Department of Energy to install the smart grid. This action allows the city to move forward with negotiating and finalizing the award for final City Council approval in January 2010.

The City of Naperville is the only municipality in the State of Illinois selected for a Smart Grid grant by the U.S. Department of Energy and was selected from more than 500 applicants.

A press conference will be held at 9 a.m. on Tuesday, December 15 in Council Chambers of the Naperville Municipal Center, 400 S. Eagle St., explaining the Smart Grid Initiative and offering a tour of the Electric Service Center and the Jefferson Avenue Electric Substation. This press conference will allow attendees to get an in-depth, behind-the-scenes look at the Smart Grid Initiative and how it will transform the city’s electric utility.

“The future of power has arrived in Naperville, and it is in the form of a smart electric grid,” said Naperville Mayor A. George Pradel. “This is an exciting opportunity for residents and businesses to directly monitor their energy usage and adjust their consumption accordingly. With our electric utility customers empowered to directly control how and when they use energy, we will lower demand on our grid, thus driving down Naperville’s cost of purchasing energy on the wholesale market. There is a potential net benefit for the city of $81 million over the next 15 years!”

The press conference is being held with the Galvin Electricity Initiative, which is conducting a case study to demonstrate how community-based smart grid projects like the Naperville Smart Grid Initiative maximize efficiency and reliability — and meet many of the Galvin Electricity Initiative’s criteria for Perfect Power. The Galvin Initiative will focus on the smart distribution system that Naperville has systematically built over the past 15 years, the electric utility foresight in developing an innovative plan and its commitment to continuous improvement and high reliability while reducing the cost of energy to residential and business customers.

“The Naperville Smart Grid Initiative serves as a model for upgrading and automating the electricity distribution system to meet consumer needs, achieve dramatic improvements in reliability and lower operations and maintenance costs,” said John Kelly, deputy director of the Galvin Electricity Initiative. “Naperville’s achievements over the past 15 years demonstrate what’s possible in electric power system transformation. They prove you can raise quality and dramatically improve reliability at lower costs.”

Naperville’s smart grid project will include:

• Complete automation of the city’s electric grid, which will provide automatic, computerized meter readings. This will enhance system efficiency and reliability, streamline customer billing and increase billing accuracy.
• The addition of more than 57,000 smart meters will allow residents and businesses to analyze and adjust their energy usage patterns, thus conserving energy and controlling consumption and costs.
• Based on the availability of real-time feedback, the Department of Public Utilities will increase utility reliability and support two-way communication flow between the customer and the utility.
• Through a better understanding of utility demand and usage, pricing can be lowered accordingly.
• The smart grid will also serve as the initial infrastructure to support electric car usage for the average household.

This project has a three-year implementation phase with work beginning in January 2010.

For more information on the City of Naperville, visit www.naperville.il.us. Sign up to receive the latest news about the City of Naperville’s projects and initiatives via e-mail at www.naperville.il.us/enews.aspx.

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About Naperville: Located 28 miles west of Chicago, Naperville, Ill., is home to approximately 145,000 people. This vibrant, thriving city consistently ranks as a top community in the nation in which to live, raise children and retire. The city is home to acclaimed public and parochial schools, the best public library system in the country, an array of healthcare options and an exceptionally low crime rate. Naperville has ready access to a variety of public transportation, housing and employment options. The city’s diversified employer base features high technology firms, retailers and factories, as well as small and home-based businesses. Residents also enjoy world-class parks, diverse worship options, the opportunity to serve on several city boards and commissions, a thriving downtown shopping and dining area, a renowned living history museum known as Naper Settlement and an active civic community. For more information, please visit our Web site at www.naperville.il.us.

U.S. on track to release climate targets ahead of Copenhagen

Nov 24, 2009

The U.S. will reportedly offer a near-term greenhouse gas emissions reduction goal ahead of the climate change negotiations in Copenhagen next month in a bid to reach an international agreement.

Senior administration officials briefed reporters Monday on President Barack Obama's intention to offer an emissions target that is in line with what is being proposed in Congress -- a reduction in emissions of between 17 percent and 20 percent below 2005 levels by 2020.

A climate change bill in the House was passed in June, while the Senate's version has cleared the Environment and Public Works Committee but faces further scrutiny and mark-up before additional committees.

The administration is still undecided as to when and if Obama will attend the high-stakes negotiations aimed at drafting a successor to the Kyoto Protocol. Some 65 world leaders are confirmed to be attending the talks running Dec. 7-18.

The news comes as the World Meteorological Organization warned that global concentrations of greenhouse gases have reached record levels since pre-industrial times. Concentrations of carbon dioxide reached 385 parts per million (ppm) in 2008, compared to pre-industrial times when levels were near constant at around 280 parts per million.

The United Nations Intergovernmental Panel on Climate Change has recommended that CO2 concentrations must remain below 450 ppm to keep temperatures form rising more than 2 degrees Celsius and avoid catastrophic climate change, although some are warning concentrations must be reduced to below 350 ppm in order to keep Earth "similar to that on which civilization developed and to which life on Earth is adapted," climate scientist James Hansen wrote in a 2008 paper.

New Q&A for Treasury Dept. Energy Payment Program

Under the Recovery Act, the Treasury Department makes payments to those who place in service specified energy property in lieu of tax credits. The payments are used to reimburse those in the program for a portion of their property’s expense. There is a new Frequently Asked Questions and Answers Form for those interested in submitting an application.

DOE Invests $12 Million in Early State Solar Technologies

The Department of Energy announced on Wednesday that it would invest up to $12 million in Recovery Act funding in four companies to support development of early stage solar energy technologies and help them advance to commercial scale.  Companies awarded under the funding will work with NREL to transition prototype and pre-commercial PV technologies into pilot and full-scale manufacturing. 

United States Announces Two Major Clean Air Act New Source Review Settlements at 28 Industrial Plants NationwideWASHINGTON — The United States today filed two major Clean Air Act settlements to reduce air emissions from container glass and Portland cement plants throughout the country, announced Cynthia Giles, assistant administrator for the U.S. Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance and Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division.

WASHINGTON — The United States today filed two major Clean Air Act settlements to reduce air emissions from container glass and Portland cement plants throughout the country, announced Cynthia Giles, assistant administrator for the U.S. Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance and Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division. 

The settlements cover 15 U.S. plants owned by Saint-Gobain Containers, Inc., the nation’s second largest container glass manufacturer, and all 13 U.S. plants owned by the Lafarge Company and two subsidiaries, the nation’s second largest manufacturer of Portland cement. These settlements are the first system-wide settlements for these sectors under the Clean Air Act and require pollution control upgrades, acceptance of enforceable emission limits and payment of civil penalties.

       

The facilities are estimated to reduce a combined 41,000 tons of sulfur dioxide (SO2), nitrogen oxides (NOx), and particulate matter (PM) each year. SO2, NOx, and PM can trigger respiratory difficulties and asthma, and environmental harms such as acid rain, visibility impairments, and water quality impacts.

“Consistent with Administrator Lisa P. Jackson’s seven priorities, these settlements call for tough new controls and innovative technologies to cut down on harmful air emissions that threaten the health of millions of Americans,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “I am also pleased that 17 states and two local governments have joined as signatories to these actions.”

“These two settlements are excellent examples of businesses working with government to achieve compliance at their facilities around the country, which will benefit the health of local communities and the environment,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Enforcing the Clean Air Act's new source review program is a priority, not just in the coal-fired power plant industry, but also in industries like cement and glass manufacturing that have been identified as major sources of air pollution. Companies in these industries should strongly consider the benefits of these types of settlements as we intend to aggressively enforce compliance with the law.”  

These settlements are part of the federal government’s focus on improving compliance among industries that emit significant amounts of illegal air pollution, including cement manufacturing, glass manufacturing, acid production and coal-fired power. The settlements also reflect the seven key themes EPA Administrator Lisa P. Jackson outlined last week to guide EPA’s work. Installing tough new controls and technology at these facilities will greatly reduce air pollution in the communities that are downwind of the facilities covered by the settlements. The settlements also build on strong state partnerships as 17 states and two local air control agencies are joining in the settlements.

Saint-Gobain Containers

Saint-Gobain Containers, Inc. of Muncie, Ind. has agreed, in a consent decree filed today in federal court in Seattle, to install pollution control equipment at an estimated cost of $112 million to reduce emissions of NOx, SO2, and PM by approximately 6,000 tons each year. The settlement covers 15 plants in 13 states. Two of the 15 plants have been closed by Saint-Gobain for independent business reasons.

This is the federal government’s first nationwide Clean Air Act settlement with a glass manufacturer that covers all of a company’s plants. The states of Illinois, Indiana, Louisiana, Commonwealth of Massachusetts, Missouri, North Carolina, Oklahoma, Commonwealth of Pennsylvania, Washington, and Wisconsin, as well ahe Puget Sound Clean Air Agency and the San Joaquin Valley Unified Air Pollution Control District, joined in today’s settlement.

In addition, as part of the settlement, Saint-Gobain has agreed to pay a $2.25 million civil penalty to resolve its alleged violations of the Clean Air Act’s new source review regulations. Of the $2.25 million civil penalty, Saint-Gobain will pay $1.15 million to the United States and $1.1 million to the 10 states and two local regulatory agencies that joined the case. 

      

The settlement covers the following 15 facilities located in the following cities: Burlington, Wis. (two furnaces); Carteret, N.J. (one furnace) (closed); Dolton, Ill. (three furnaces); Dunkirk, Ind. (two furnaces); Henderson, N.C. (two furnaces); Lincoln, Ill. (one furnace); Madera, Calif. (one furnace); Milford, Mass. (two furnaces); Pevely, Mo. (two furnaces); Port Allegany, Pa. (three furnaces) (one closed); Ruston, La. (two furnaces); Sapulpa, Okla. (three furnaces); Seattle, (four furnaces); Waxahachie, Texas (one furnace) (closed); and Wilson, N.C. (two furnaces).

       

 Saint-Gobain has agreed to implement pollution controls, including the installation of the first-ever selective catalytic reduction (SCR) system at a container glass plant in the U.S. Saint-Gobain will also install continuous emission monitoring systems (CEMS) at all of their glass plants.

In the complaint filed concurrently with today’s settlement, the federal government and the 10 state and two local governments alleged that the company constructed new glass furnaces or modified existing ones over the course of two decades without first obtaining pre-construction permits and installing required pollution control equipment. The alleged violations were discovered after an EPA investigation that included inspections, file reviews, information requests, and the review and analysis of data obtained from the company. The Clean Air Act requires major sources of air pollution to obtain such permits before making changes that would result in a significant increase in emissions of any pollutant.

The consent decree, lodged today in the U.S. District Court for the Western District of Washington, is subject to a 30-day public comment period and approval by the federal court. 

Lafarge North America

Lafarge North America, Inc., based in Herndon, Va., and two of its subsidiaries have agreed in a consent decree filed in federal court in Benton, Ill., to install and implement control technologies at an expected cost of up to $170 million to reduce emissions of NOx by more than 9,000 tons each year and SO2 by more than 26,000 tons per year at their cement plants.

The states of Alabama, Illinois, Iowa, Kansas, Michigan, Missouri, New York, Ohio and the Commonwealth of Pennsylvania Department of Environmental Protection, the South Carolina Department of Health and Environmental Control, the Washington State Department of Ecology, the Oklahoma Department of Environmental Quality, and the Puget Sound Clean Air Agency are joining the settlement. 

In addition, as part of the settlement, Lafarge has agreed to pay a $5 million civil penalty to resolve alleged violations of the Clean Air Act’s new source review regulations. Of the $5 million civil penalty, Lafarge will pay $3.4 million to the United States and $1.7 million to the 13 participating states and agencies. The facilities included in the settlement are located in or near:  Whitehall, Pa., Ravena,N.Y., Calera, Ala., Atlanta, Ga., Harleyville, S.C., Paulding, Ohio, Alpena, Mich., Tulsa, Okla., Sugar Creek, Mo., Buffalo, Iowa, Fredonia, Kan., Grand Chain, Ill. and Seattle.

       

Lafarge has agreed to install the first-ever SCR system at a cement plant in the United States. In addition, Lafarge has also agreed to install seven selective non-catalytic reduction (SNCR) systems at long dry cement kilns. This is among the first application of this technology to this type of kiln in the United States.   Lafarge will also install CEMS at all of their cement kilns. This is among the first application of this technology to this type of kiln in the United States.   Lafarge will also install CEMS at all of their cement kilns.

In the complaint filed concurrently with today’s settlement, the United States alleged that Lafarge and its subsidiaries, or their predecessors, modified one or more of each of their facilities without first obtaining pre-construction permits and installing required pollution control equipment as required by the Clean Air Act. These violations were discovered as a result of EPA investigations and review of company submitted data. The states and agencies joining in the settlement have made similar allegations in their complaint, which is filed separately.

The consent decree, lodged today in the U.S. District Court for the Southern District of Illinois, is subject to a 30-day public comment period and approval by the federal court. 

       

Nitrogen oxides are one of the main ingredients involved in the formation of ground-level ozone, which can trigger serious respiratory problems. They react to form nitrate particles, acid aerosols, as well as nitrogen dioxides (NO2), which also cause respiratory problems. They also contribute to formation of acid rain, nutrient overload that deteriorates water quality, the creation of atmospheric particles that cause visibility impairment most noticeable in national parks, react to form toxic chemicals, and contribute to climate change.

       

Exposure to SO2 can aggravate asthma, cause respiratory difficulties, and result in emergency room visits and hospitalization. People with asthma, children, and the elderly are especially vulnerable to SO2’s effects. Exposure to particulate matter is also linked to respiratory problems like asthma and other adverse health effects.

       

Recovery Act Announcement: Secretary Chu Announces More Than $20.5 million for Community Renewable Energy Deployment ProjectsJanuary 21, 2010

January 21, 2010

U.S. Department of Energy (DOE) Secretary Steven Chu announced today the selection of five projects to receive more than $20.5 million from the American Recovery and Reinvestment Act to support deployment of community-based renewable energy projects, such as biomass, wind, and solar installations. These projects will promote investment in clean energy infrastructure that will create jobs, help communities provide long-term renewable energy and save consumers money. They will also serve as models for other local governments, campuses, or small utilities to replicate, allowing other communities to design projects that fit their individual size and energy demands.
"Smaller, more localized renewable energy systems need to play a role in our comprehensive energy portfolio," said Secretary Chu. "These projects will help create jobs, expand our clean energy economy, and help us cut carbon pollution at the local level."

Installation of Wind and/or Solar Equipment Eligible for Bonus Depreciation Must be Installed by December 31st! Call Kuma Energy Today!

Rapid Depreciation for Solar & Wind Ends December 31st! The federal Economic Stimulus Act of 2008, enacted in February 2008, included a 50% bonus depreciation provision for eligible renewable-energy systems acquired and placed in service in 2008. This provision was extended, retroactively to the entire 2009 tax year, under the same terms by The American Recovery and Reinvestment Act of 2009, enacted in February 2009. To qualify for bonus depreciation, a project must satisfy these criteria: the property must have a recovery period of 20 years or less under normal federal tax depreciation rules;   the original use of the property must commence with the taxpayer claiming the deduction;   the property generally must have been acquired during 2008 or 2009; and   the property must have been placed in service during 2008 or 2009 If property meets these requirements, the owner is entitled to deduct 50% of the adjusted basis of the property in 2008 and 2009. The remaining 50% of the adjusted basis of the property is depreciated over the following 4 years. The bonus depreciation rules do not override the depreciation limit applicable to projects qualifying for the federal business energy tax credit. Before calculating depreciation for such a project, including any bonus depreciation, the adjusted basis of the project must be reduced by one-half of the amount of the energy credit for which the project qualifies. http://dsireusa.org/incentives/incentive.cfm?Incentive_Code=US06F&re=1&ee=1

Harvard University Purchases Renewable Energy from Maine Wind Farm Harvard University reached an agreement with First Wind to purchase half of the power and associated renewable energy certificates (RECs) generated by the Stetson Wind II project near Danforth, Maine. The project will use 17 General Electric, 1.5 MW turbines. Harvard's purchase will equate to approximately 24 million kilowatt-hours per year, which represents more than 10 percent of the electricity used by Harvard's Cambridge and Allston campuses. According to the U.S. Environmental Protection Agency (EPA), the purchase makes Harvard the largest purchaser of wind power by a university or college in New England.