Entrepreneurs and small businesses involved in the development, production, and use of renewable energy or energy efficient products are hastily turning law into opportunity, and re-working their business plans with the American Recovery and Reinvestment Act (ARRA) in mind.
One of the central components of the Act is the provision of at least $25 billion dollars in core energy efficiency programs, and billions more that can be applied to energy efficiency projects.
These programs create unprecedented opportunity – not only in helping small businesses find new customers, but also in providing ways to save money and earn tax credits for internal energy efficiency programs and projects.
This post outlines the key incentives in the Recovery Act that pertain to government, business, and consumer energy efficiency programs.
You’ll also find links to additional information from the U.S. government and other organizations that can help your small business take advantage of this unprecedented injection of cash into the “greening” of America.
Energy Efficiency Provisions of the ARRA
The ARRA contains significant direct spending programs, tax incentives, loan guarantees and bond programs to support the development of renewable and clean energy technologies.
Below is a summary of the key provisions that should be of interest to small business owners looking for incentives to start or grow existing business ventures or address new residential markets for energy efficient products and services:
- Loan Guarantees – The Act includes $6 billion for the Innovative Technology and Loan Guarantee Program, which supports the commercial use of technologies to avoid and lower air pollutants, greenhouse gases, etc.
- Homeowner Tax Credit – A 30 percent investment tax credit through 2016 is available to homeowners to implement energy improvements. If you are in the business of providing solar electric, solar thermal, wind and geothermal heat pumps to consumers, this is a big marketing opportunity.
- Home Weatherization – The Act include $5 billion for the weatherization of low-income family homes. This is a win for residential weatherization experts and contractors.
- Energy Production Tax Credit – A 30 percent investment tax credit is available for facilities engaged in the production of renewable energy (e.g. solar, wind, biomass, geothermal, small irrigation, hydropower, etc.).
- “Green” Training – The Act sets aside $500 million for research, labor exchange and job training projects to prepare workers for careers in energy efficiency and renewable energy industries.
- Research and Development – The Act stipulates a 20 percent research and development tax credit for 2009 and 2010 for the fields of fuel cells, battery technology, renewable energy, energy conservation technology, efficient transmission and distribution of electricity, and carbon capture and sequestration.
This summary chart from the Alliance to Save Energy provides a more detailed outline of the key energy efficiency initiatives contained in the ARRA including many that represent opportunity for small business owners.
Take Advantage: Green Business Resources and Programs
Whether you are looking to fund the development of green technologies, design and build energy efficient buildings, comply with environmental regulations, or market a green business, Business.gov’s Green Business Guide offers a range of resources for small business owners to help them expand their “green” ventures.