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Five PeT boTTles (plastic soda bottles) yield enough fber or

one extra large T-shirt, one square ood o carpet or enough fber fll-to-

fll one ski jacket. (National Recycling Coalition)

RTL | Recycling | Transer Stations | Landflls

landf

Federal Funding Resources: Department o the Treasury


Through The approximaTely 550 operaTional

landfll gas (LFG) energy projects, communities,

landfll owners and operators, and State ofcials

across the United States have learned that LFG is

an important local and regional resource. To develop

LFG energy projects, landfll owners and operators

capture LFG and convert it into renewable energy.

Converting LFG into energy reduces odors and

hazards associated with LFG emissions and helps

reduce reliance on ossil uel—based energy. Landfll

gas is also a valuable renewable resource that, when

used, helps prevent landfll methane rom migratinginto the atmosphere and contributing to local smog

and global climate change.

While LFG recovery oers signifcant

environmental, energy, and economic benefts to

the public and private sector, there are still barriers

to project development. Below are some ederal

unding resources to consider.

Renewable ElectricityProduction Credit

Legislation in 2009 extended the in-service date

or landfll gas energy projects to December 31,

2013 in order to qualiy or PTC. The renewable

electricity production tax credit (PTC) is a per

kilowatt-hour (kWh) ederal tax credit included

under Section 45 o the U.S. tax code or electricity

generated by qualifed energy resources. The PTC

provides a corporate tax credit o 1.1 cents/kWh

or landfll gas, open-loop biomass, municipal solidwaste resources, qualifed hydropower, and marine

and hydrokinetic (150 kW or larger). Electricity

rom wind, closed-loop biomass, and geothermal

resources receive 2.2 cents/kWh. Projects that

receive other government grants or subsidies receive

a discounted tax credit.

Initially enacted as part o the Energy Policy Act

o 1992, the credit has expired and been renewed

on a number o occasions, most recently with the

passage o the American Recovery and Reinvestment

Act o 2009. The legislation extended the in-service

deadlines or qualiying renewable technologies. For

landfll gas energy projects, the placed-in-service

date is December 31, 2013. This requirement has

generally been interpreted to mean that, by this

date, the acility must have generators installed andworking or be in a condition that is ready to generate

electricity. The credit can be claimed, however, only

when electricity is produced and sold to an unrelated

third party. Landfll gas energy project owners can

claim the PTC or the frst 10 years o operation.

There is no maximum limit or credits claimed

through the PTC. To apply or the tax credit, a

business must complete Form 8835, “Renewable

Electricity Production Credit,” and Form 3800,

“General Business Credit.” Form 8835 is available

at www.irs.gov/pub/irs-pd/8835.pd orm 3800 is

available at www.irs.gov/pub/irs-pd/3800.pd.

For more information, contact Philip Tiegerman,

Internal Revenue Service, at (202) 622-3110.

Business EnergyInvestment Tax Credit

A taxpayer can receive only one o the incentives—

the PTC, ITC or renewable energy grant. TheAmerican Recovery and Reinvestment Act o 2009

modifed Section 48 o the U.S. tax code to allow

owners o PTC-eligible renewable projects, such as

landfll gas energy projects, to make an irrevocable

92 WasteAdvantage Magazine October 2011

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WasteAdvantage Magazine October 2011 93


election to earn a one-time corporate investment tax credit (ITC) in lieu o

claiming the PTC. The ITC is equal to 30 percent o the costs attributable to

the acility, which typically excludes other project costs, such as transmission

equipment or ancillary site improvements. The ITC does not impose the thirdparty power sale requirement that the PTC does. To apply or the tax credit, a

business must complete Form 3468, “Investment Credit,” which is available at

www.irs.gov/pub/irs-pd/3468.pd.

For more information, contact Public Information Specialist, Internal Revenue

Service, at (202) 622-3110.

Section 1603 Cash Grant or Renewable EnergyAdministered by the U.S. Department o Treasury, Section 1603 o the

American Recovery and Reinvestment Act o 2009 created a new grant

program or taxpayers eligible or the Business Energy ITC. A acility owner

can choose to receive a one-time grant equal to 30 percent o the construction

and installation costs or the acility, as long as the acility is depreciable or

amortizable. To be eligible, the acility must be placed in service in 2009,

2010, or 2011 or construction must begin in any o those years and be

completed prior to the end o 2013. The Tax Relie, Unemployment Insurance

Reauthorization, and Job Creation Act o 2010 extended the grant application

deadline o Section 1603 one year to October 1, 2012.

For more information, contact Public Information Specialist, Internal Revenue Service

at (202) 622-3110 or visit www.treas.gov/recovery/1603.shtml.

Clean Renewable Energy BondsThe 2005 Energy Policy Act created Clean Renewable Energy Bonds

(CREBs) within Section 54 o the U.S. tax code. Unlike traditional bonds

that pay interest, tax credit bonds pay the bondholders by providing a credit

against their ederal income tax. In eect, CREBs provide interest-ree

fnancing or clean energy projects. The types o projects or which bonds canbe issued include renewable energy projects using landfll gas, wind, biomass,

geothermal, solar, municipal solid waste, small hydroelectric, marine and

hydrokinetic. The Internal Revenue Service (IRS) has determined that acilities

“unctionally related and subordinate” to the generation acility itsel are also

eligible or CREB fnancing. Examples o these auxiliary components include

transmission lines and interconnection upgrades.

The Energy Improvement and Extension Act o 2008 directs the IRS to allocate

the bonding authority equally among electric cooperatives, government entities

and public power producers. Other changes or “new” CREBs are as ollows:

• The federal tax credit is reduced to 70 percent of the interest payment

• The bond holder can transfer the tax credit to another party

• Taxpayers can carry forward unused credits into future years

• Bond proceeds must be used within three years or a request for an extension

must be made

Each year, the IRS solicits applications and releases guidance on how the

program will operate (e.g., criteria or determining allocations).

For more information, contact Zoran Stojanovic, Internal Revenue Service, at (202)

622-3980.

Qualifed Energy Conservation BondsIn 2008, Congress created Qualifed Energy Conservation Bonds, a fnancing

program similar to CREBs. The Energy Improvement and Extension Act o

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RTL | Recycling | Transer Stations | LandfllsRTL | Recycling | Transer Stations | Landflls

2008 created a new unding mechanism similar to the CREB model in which a

bondholder receives tax credits in lieu o interest. The act authorizes state, local

and tribal governments to issue energy conservation bonds to fnance qualifed

projects. The bond proceeds can be used to fnance capital expenditures thatachieve one o the ollowing goals:

• Reduction of energy consumption by at least 20 percent

• Implementation of a green community program

• Electricity generation rom renewable resources in rural areas

For more information, contact Zoran Stojanovic, Internal Revenue Service, at (202)

622-3980 or visit www.irs.gov/pub/irs-drop/n-09-29.pdf.

Advanced Energy Manuacturing Tax CreditThe American Recovery and Reinvestment Act o 2009 established the

Advanced Energy Manuacturing Tax Credit to encourage the development o

a U.S.-based renewable energy manuacturing sector. The American Recovery

and Reinvestment Act o 2009 authorizes the Department o the Treasury

to issue $2.3 billion o credits under the program. In any taxable year, the

investment tax credit is equal to 30 percent o the qualifed investment

required or an advanced energy project that establishes, re-equips or expands a

manuacturing acility that produces any o the ollowing:

• Equipment and/or technologies used to produce energy from solar, wind,

geothermal, or other renewable resources

• Fuel cells, microturbines, or energy-storage systems for use with electric orhybrid-electric motor vehicles

• Equipment used to rene or blend renewable fuels

• Equipment and/or technologies to produce energy-conservation

technologies (including energy-conserving lighting technologies and

smart grid technologies)

Manuacturing acilities that develop equipment or landfll gas energy

projects can presumably qualiy under the frst bullet above. Qualifedinvestments generally include personal tangible property that is depreciable

and required or the production process. Other tangible property may be

considered a qualifed investment only i it is an essential part o the acility,

excluding buildings and structural components.

To be eligible or the tax credit, a project must be certifed by the

Department o the Treasury. In determining which projects to certiy, the

American Recovery and Reinvestment Act o 2009 directs the Department o

the Treasury to consider those projects that most likely will:

• Be commercially viable

• Provide the greatest domestic job creation

• Provide the greatest net reduction of air pollution and/or greenhouse gases

• Have the greatest potential for technological innovation and commercial

deployment

• Have the lowest levelized cost of generated (or stored) energy or the lowest

levelized cost o reduction in energy consumption or greenhouse gas

emissions

• Have the shortest project time from certication to completion

Ater certifcation is granted, the taxpayer has up to one year to provide

additional evidence that the requirements o the certifcation have been metand three years to put the project in service.

For more information, contact the U.S. Department of Treasury at (202) 622-2000

or visit www.energy.gov/recovery/48C.htm.

94 WasteAdvantage Magazine October 2011

©2011 Waste Advantage Magazine, All Rights Reserved. Reprinted from Waste Advantage Magazine.Contents cannot be reprinted without permission from the publisher.

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