|Fuel Cells & Microturbines|
|Credit Available||30% of total cost, including labor, up to $500 per 0.5 kW capacity
Unused credit may carry over to future tax years
|Timeline||Must be "placed in service" (ready and available for use)
Jan. 1, 2009 – Dec. 31, 2016
|Fuel Cells||Minimum efficiency of 30%, and minimum capacity of 0.5 kW|
|See summary chart: Stimulus at a Glance|
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Remodelers can take advantage of the fuel cell tax credits updated by the 2009 American Recovery and Reinvestment Act in several ways: for their own businesses and vehicle use as well as part of a broader marketing strategy of teaching consumers about new energy-saving options.
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The fuel cell tax credit information has four sections: commercial, residential, multidwelling unit, and alternative vehicles. The legislation specifies that qualified systems must have “a nameplate capacity of at least 0.5 kW of electricity using an electrochemical process and an electricity-only generation efficiency greater than 30%.”
The language about residential fuel cell tax credit eligibility can be confusing because there are distinctions made regarding individual taxpayers who are homeowners and those who share “joint occupancy,” i.e., more than one individual taxpayer, who own a residence together (not to be confused with “married couples filing jointly”).
Unlike the other renewable energy credits, the fuel cell tax credit is capped (there are different caps for individual versus joint occupancy) and the taxpayer(s) must use the home as their principal residence. The cap for an individual taxpayer is $500 per 0.5 kW of energy capacity. (For those in a joint occupancy situation, the limit is $1,667 per 0.5 kW.) The credit taken is the lesser of either 30% of the system’s cost or the amount derived from $500 per 0.5 kW (or from $1,667 per 0.5kW in joint occupancy).
In California, Michael McCutcheon, owner of McCutcheon Construction, in Berkeley, is preparing a residential site for installation of a 0.5 kW system. Because the technology is so new, he says, “We’re going through the process with the city of Berkeley to see that it gets approved and field-stamped.” McCutcheon believes the use of fuel cells will catch on “if they can get the installed price down.” (Read an interview with McCutcheon.)
A fuel cell is an electrochemical device that converts hydrogen and oxygen into electricity without combustion. A “reformer” or processor extracts the hydrogen from hydrocarbon fuels such as natural gas. Despite the need for fossil fuels with this system, “You’re using them much more efficiently,” says Bud DeFlaviis, director of government affairs at the U.S. Fuel Cell Council. “You’re generating electricity where you need it, right in your home, avoiding transmission losses [along the power grid].”
Fuel cell technology isn’t being pursued as heavily in the residential sector as it is for large buildings (Manhattan’s new Twin Towers will have fuel cell power), commercial use, and vehicles. A few manufacturers working on residential fuel cells include Plug Power, in Albany, N.Y., and ClearEdge Power, with offices in California and Oregon.
One place where remodelers can make out well is by claiming tax credits for vehicle purchase. Forklifts powered by fuel cells are eligible for tax credits as are dozens of alternative-energy cars and work trucks. Taxpayers can also deduct state and local sales and excise taxes paid on a portion below $50,000 of the purchase price of these new vehicles. For a list of hydrogen-powered and other alternative fuel vehicles, go to the Alliance to Save Energy’s website. —Stacey Freed, senior editor, REMODELING.
Qualified systems must be in place in the taxpayer’s principal residence on or after Jan. 1, 2008 and on or before Dec. 31, 2016. The credit is capped, with different maximums for individual ($500 per 0.5 kW of energy capacity) versus joint occupancy ($1,667 limit per 0.5 kW). The credit taken is the lesser of either 30% of the system’s cost or the amount derived from $500 per 0.5 kW (or from $1,667 per 0.5 kW in joint occupancy).