Going Green? Where is my Green!!!

September 5th, 2006 BY Arwen Brenneman | 2 Comments

Some environmental government initiatives are well known; bottle deposit and refund programs are immediately visible to the consumer, are comprehensive, and their motivation is clear. Other incentives are priced in at the register, which means we may not be aware of the incentive existing: for example, in British Columbia, bicycles and energy conservation equipment are provincial sales tax exempt. In most of Canada, ethanol- and methanol- blended fuels are discounted at the pump through federal fuel tax exemptions, and in some provinces, these are joined by additional provincial discounts.

When considering switching your home or car to a form of renewable energy, there are programs that might help, but they’re less obvious – hidden in the arcana of tax codes and government-speak. If you’re considering putting in a solar panel for electricity or water heating, or want to buy a hybrid or natural gas car, will the government care enough to chip in? In North America, the answer is often yes: there are tax credits and tax deductions and grants available in the States and Canada, either federally or, to varying levels, through state and provincial incentives.

In 2005, the US introduced the Energy Policy Act, which every alternative energy fan should know about. It allows individuals to take tax credits; these are nicer than tax deductions, because you get a dollar back for your dollar spent, and not merely a percentage. Individual States also provide residents with incentives to go green.

The DSIRE – or the Database of State Incentives for Renewable Energy, for those who like their acronyms to have meaning – is a good friend to individuals and corporations who would like to research funding possibilities for environmentally conscious projects. Here you can find a comprehensive listing of state-specific tax incentives, laws governing installation and use, and related energy programs. For example, many states provide tax credits or deductions for geothermal heating, solar panel system purchase, energy efficiency upgrades, or have in-state utility company subsidies for home efficiencies.

Individual Canadians who wish to switch to alternative sources of energy have less help than their American counterparts. Provinces provide rebates, grants, or sales tax exemptions on a variety of different products; and most of the provincial energy producers have programs that will help customers upgrade to more efficient systems in their homes. Federally, commercial interests are supported by initiatives towards more new-home building or retrofit, but there is not a comprehensive federal act in place directed at individuals like the Energy Policy Act in the States. In Canada programs come and go, usually lasting 9 months to a year: what’s currently available may change in 6 months time.

Show me the Money: Transportation

Under the American Energy Policy act, individuals and businesses who buy or lease a new hybrid gas-electric car or truck are eligible for, and can receive, an income tax credit of $250-$3,400 depending on the fuel economy and the weight of the vehicle. There is a similar credit for alternative-fuel vehicles and for fuel-cell vehicles.

In Canada, you’re out of luck federally since the Natural Gas for Vehicles initiative has ended. If you live in B.C., Ontario, Quebec, or P.E.I., you can get partial provincial sales tax rebates on the purchase of a hybrid car. In B.C. the maximum is $2,000; in Ontario, $2,000; in Quebec, $1,000; and in PEI, up to $3,000. In B.C., you do not pay provincial sales tax on bicycles, helmets, or bicycle repairs.

Show me the Money: Energy Efficiency

Each State and Province has its own energy efficiency initiatives, run usually by the electric power provider(s) in the area. Unless you’re a tax wizard, you may be unaware that in the States, Section 136 of the tax code says that if your utility company gives you money or a subsidy on your bill for being part of an energy efficiency program, that money cannot be taxed.

The Energy Policy Act sets out federal relief for Americans in the form of credits for energy-efficient windows, doors, and roofs, up to $500, or credits for purchase of qualified efficient appliances as follows:

electric heat pumps [$300];
electric heat pump water heaters [$300];
geothermal heat pumps [$300];
central air conditioners [$300];
natural gas, propane, or oil water heaters [$300];
natural gas, propane, or oil furnace or hot water boilers [$150]; and
advanced main air circulating fans [$50].

Show me the Money: Energy Production

In the States, a federal 30% tax credit, up to $2,000, is available on the purchase and installation of residential photovoltaic (solar electric) and solar water heating property. An individual can take both a 30% credit up to the $2,000 cap for a photovoltaic system and a 30% credit up to a separate $2,000 cap for a solar water heating system. A 30% tax credit up to $500 per 0.5 kW is also available for fuels cells. On top of this federally mandated incentive, there are further state incentives to be had, which the committed individual energy producer should research at DSIRE. With a little extra investment, any energy produced above a household’s own needs can be sold back to the state’s power grid.

Ontario offers rebates of the provincial retail sales tax (RST) on the purchase of residential solar, wind, micro-hydroelectric or geothermal energy systems, or on any expansions or upgrades to existing systems installed in residential premises until November 25, 2007.

Show me the Money: Housing Initiatives

In the US, the Energy mortgage – either on an existing home or a new one – underwrite extra financing on a mortgage to offset the cost of energy efficiency improvements, up to a maximum of $8000.

In Ontario, the Canadian Housing and Mortgage Corporation will provide a maximum of $3000 to qualifying low income households to make energy upgrades. Other provincial and federal programs partnering with the CHMC have been discontinued. Saskatchewan started a similar program to run from August, 2006 to March 2007, which provides up to $2000. Quebec similarly will offer grants to either new Novoclimat buildings or EnerGuide refits, up to $2000. New Brunswick will help provide an interest free loan to homeowners.

Useful Links

United States