Oregon Wind Working Group

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Oregon Wind Working Group
October 19, 2005
Jeff Keto, Loan Manager Energy Loan Program
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Oregon Dept. of Energy Resources

• Business Energy Tax Credit
• Energy Loan Program
• Project technical and design review
• Project financial review

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Eligible ProjectsTax Credits and Loans

• Encourages investments in
• Energy efficiency measures
• Renewable energy production
• Alternative fuels
• Reducing commuting
• Sustainable building design
• RD (new for tax credits)

New Eagle Rock ElementaryEagle Point,
ORApplying for LEED certification
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Renewable Resource Projects

• Qualifying energy production projects
• Solar
• Wind
• Small Hydro (limit 1 MW for tax credits)
• Geothermal
• Biomass Biogas
• Waste Heat

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Business Energy Tax Credit

• Businesses, tribes, non-profits, public
  entities can apply
• Owner must apply before project start
• 35 of eligible project costs
• Project owners pay review fee (0.75 of
  eligible costs)
• Tax credit taken over 5 years (10, 10,
  5, 5, and 5)
• If eligible costs are 20,000 or less,
  credit taken in one year

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Business Energy Tax Credit cont.

• Project must be 10 more efficient than energy
  code or standard industry practice
• Lighting retrofits must be 25 more efficient
• Project generally must have a simple payback of
  1 to 15 years
• Eligible costs can include design, engineering,
  equipment, installation

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• The Pass Through- Partner
• Pays the net present value (25.5) of eligible
  project costs and gets the 35 tax credit
• Business or Individual (one or more)
• Must have an Oregon tax liability
• Can help capitalize a project

35 tax credit
Project owner (church, school, public entity,
business, etc.)
Pass-through partner (business or individual
withan Oregon tax liability)
25.5 payment
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Energy Loan Program

• Eligible applicants public entities, tribes,
  businesses, individuals, non-profits
• Loans for efficiency, renewables, recycled
  products and alternative fuels
• Eligible costs study, design, engineering,
  installation, commissioning
• No cost to taxpayers fees and interest spread
  pay program costs
• Loans Activity 600 loans for over 315 million
• Energy Savings/production 44 million per year

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Energy Loan Program Terms

• 20,000 to 20 million
• 5 to 20 year terms
• Construction or take-out loans
• Application fee 1 loan fee
• Fixed rates (Oct. 2005)
  for 15 year term
• Taxable 6.5
• Tax-exempt 5.5 - 6.0
• Collateral required

Flexible terms and loan structure!
Viridian Place Portland
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Energy Loan Program - Examples
Tamarack Wellness Center Eugene
Can combine with Business Energy Tax Credit,
Energy Trust and most other incentives
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Technical Project Development Assistance

• Review project design engineering
• Technical support in selecting energy measures
• Assist in troubleshooting
• existing projects
• Assistance in developing demonstration projects
• Review business plans funding sources,
  financial projections, ownership structure,
  management, project time line, etc.

Ashland City Hall
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Federal Tax Benefits

• Production Tax Credit
• Through 12/31/07, 10 year credit
• wind, biomass, geothermal, landfill gas,
  municipal solid waste, some hydro under 5MW
• 1.9/kWh wind, closed-loop biomass, others at
  0.9/kWh
• Reduced by BETC, govt. grants, subsidized energy
  financing
• Investment Tax Credit
• Through 12/31/05, 30 credit for solar projects
• Alternative Fuel Producer Tax Credit (ethanol
  51, biodiesel 50 or 1.00 excise or income tax
  credit)

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Other Benefits

• Accelerated depreciation for owner/investor
• Renewable Energy Credits (green tags)
• Energy Trust of Oregon
• Bonneville Environmental Foundation
• Others
• Carbon Credits
• Climate Trust

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How to Complete a Local Project

• Build a team to share the work
• Obtain initial funding for feasibility and
  development
• Develop a business and financial plan
• Anticipate a lot of work
• Obtain community support and local sponsors
• Understand risks and commitment
• Mitigate or share risks
• Have a celebration when complete

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Actions for Energy Responsibility

• Practice home energy efficiency
• Have you received your Residential Energy Tax
  Credit?
• Home, Farm or Business
• Do everything practical to reduce your energy
  demand before you develop renewable generation
• Transportation uses around 1/3 of our energy
  resources
• Could you combine trips, use public
  transportation or car-pool?
• Walking or bicycling are great exercise
• Practice recycling
• Reduced consumption reduced energy use and
  less waste

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Contact Info

• Oregon Department of Energy
• 625 Marion St. NE
• Salem, OR 97301-3737
• 1-800-221-8035
• Jeff Keto 503-373-7981
• jeff.s.keto_at_state.or.us
• http//egov.oregon.gov/ENERGY/