Tess Tax Credits

TESS Investment Tax Credit and ESG Benefit Potential

Please be aware that all tax credits and related information are subject to change. This information is not guaranteed to be accurate, and we recommend that your tax team review your options.

Investment Tax Credits (ITC) provide up to 30% of eligible project costs for thermal energy storage systems, with additional credits for meeting labor requirements and using domestic components, enhancing financial appeal and promoting social responsibility.

TESS enhances ESG scores by reducing carbon emissions, optimizing energy use, and integrating with renewable energy. It improves energy efficiency by storing excess energy and minimizing peak-hour consumption.

 

1. Energy Efficiency and Conservation Requirements for Utilities
   • Program Type: Regulation and Mandates
   • Details: Act 129 mandates energy and peak demand reduction goals for utilities, with specific provisions for low-income and government sectors.
2. PPL Electric Utilities Business Incentive Program
   • Program Type: Financial Incentive (Rebates)
   • Details: Offers rebates for energy savings, covering up to 50% of project costs, with a maximum of $500,000 for solar and combined heat and power projects.
3. Alternative Energy Portfolio Standard (AEPS)
   • Program Type: Standard/Regulation
   • Details: Requires 18% of electricity from alternative sources by 2020-2021, including a solar carve-out.
4. Renewable Electricity Production Tax Credit (PTC)
   • Program Type: Tax Credit
   • Details: Offers credits based on renewable energy produced, with recent enhancements from the Inflation Reduction Act of 2022.
5. Business Energy Investment Tax Credit (ITC)
   • Program Type: Tax Credit
   • Details: Expanded eligibility and extended benefits under the Inflation Reduction Act of 2022, transitioning to a technology-neutral credit.
6. Energy and Emissions Goals and Standards for Federal Government
   • Program Type: Government Goals
   • Details: Outlines objectives such as 100% carbon pollution-free electricity by 2030 and net-zero emissions by 2045.
7. Modified Accelerated Cost-Recovery System (MACRS)
   • Program Type: Depreciation Mechanism
   • Details: Allows businesses to recover investments through accelerated depreciation, including bonus depreciation options.
8. Solar Alternative Energy Credits
   • Program Type: Credit System
   • Details: Allows generation of credits from solar power that utilities must purchase to meet the state’s AEPS requirements.
9. Net Metering
   • Program Type: Billing Mechanism
   • Details: Allows customers to offset electricity costs with solar generation, receiving compensation for excess power.
10. FirstEnergy Commercial and Industrial Energy Efficiency Program
    • Program Type: Rebate Program
    • Details: Provides incentives for energy efficiency improvements within FirstEnergy’s service territories.
11. Solar Energy Loan Program
    • Program Type: Loan Program
    • Details: Offers low-interest loans through the Pennsylvania Treasury to promote solar energy projects.
12. Renewable Energy Program
    • Program Type: Financial Assistance
    • Details: Supports renewable energy projects in agricultural sectors with loans, grants, or other financial means.
13. U.S. Department of Energy Loan Guarantee Program
    • Program Type: Loan Guarantee
    • Details: Facilitates investment in new and innovative energy technologies by providing loan guarantees.
14. Energy Efficient Commercial Buildings Tax Deduction
    • Program Type: Tax Deduction
    • Details: Offers deductions

Calculation Example

1. Annual Energy Savings:  800 kW× 5 hours/day× 300 days/year = 1,200,000 kWh/year
2. Annual Carbon Savings:  1,200,000 kWh/year× 0.4 kg CO2/kWh = 480,000 kg CO2/year

 

Operational resilience is bolstered by TESS through reduced energy costs and increased grid independence during peak demand, fortifying the overall financial performance of businesses. 

TESS boosts operational resilience by reducing energy costs and increasing grid independence. It supports ESG goals by promoting sustainability, job creation, regulatory compliance, and transparent reporting.

References

1. https://www.mcguirewoods.com/client-resources/alerts/2023/11/irs-refreshes-and-codifies-energy-property-tax-credit-guidance-in-proposed-section-48-regulations/
2. https://www.reuters.com/legal/legalindustry/inflation-reduction-act-expands-tax-credits-energy-projects-2022-09-15/
3. https://www.morganlewis.com/pubs/2023/11/treasury-and-irs-publish-long-awaited-guidance-on-renewable-energy-investment-tax-credit
4. https://www.energy.gov/eere/solar/federal-solar-tax-credits-businesses