North Carolina Energy Improvement Loan Program (EILP)

North Carolina's Energy Improvement Loan Program (EILP) is available to businesses, local governments, public schools, community colleges, and nonprofit organizations for projects that include energy efficiency improvements and renewable energy systems.

Loans with an interest rate of 1% are available for certain renewable-energy and energy-recycling projects. Eligible renewable-energy projects generally include solar, wind, small hydropower (less than 20 megawatts) and biomass. Loans with a rate of 3% are available for projects that demonstrate energy efficiency; energy cost savings or reduced energy demand. Energy conservation projects usually include improvements to HVAC systems, energy management controls, and high efficiency lighting and building envelope improvements. Loans are secured by bank letter-of-credit (non-applicable for local governments and school systems).

Federal Tax Credits
In 2005, President George Bush signed the United States Energy Policy Act. This legislation gives financial incentives to residential contractors and commercial building owners that build energy efficient homes and buildings. By using energy efficient building materials such as structural insulated panels (SIPs), builders and contractors can qualify for a $2000 tax credit on residential homes or up to a $1.80 per square foot tax deduction on commercial buildings.

To receive the $2000 tax credit for homes, the builder must follow the guidelines set out in IRS Notice 2006-27. To do so, the home must undergo an inspection from an energy rater certified through the Residential Energy Services Network (RESNET). To find a RESNET energy rater in your area visit the RESNET website.

* Note: Available environmental tax credits and deductions vary by region. Visit http://www.dsireusa.org for information about tax incentives in your region.

North Carolina Tax Incentives

North Carolina offers a tax credit equal to 35% of the cost of eligible renewable energy property constructed, purchased or leased by a taxpayer and placed into service in North Carolina during the taxable year. The credit has been amended several times since its original inception. Most recently, House Bill 512 of 2009 extended the eligibility to geothermal equipment, extended the expiration date to December 31, 2015, and allowed the credit to be taken against the Gross Premiums Tax. The credit is subject to various ceilings depending on sector and the type of renewable-energy system. The following credit limits for various technologies and sectors apply:

• A maximum of $3,500 per dwelling unit for residential active space heating, combined active space and domestic water-heating systems, and passive space heating;
• A maximum of $1,400 per dwelling unit for residential solar water-heating systems, including solar pool-heating systems;
• A maximum of $10,500 per installation for photovoltaic systems (also known as PV systems or solar-electric systems), wind-energy systems or certain other renewable-energy systems for residential use;
• A maximum of $8,400 for geothermal heat pumps and geothermal equipment that uses geothermal energy for water heating or active space heating or cooling;
• A maximum of $2.5 million per installation for all solar, wind, hydro, geothermal and biomass applications for commercial or industrial facilities, including PV, day lighting, solar water-heating and space-heating technologies.

Renewable-energy equipment expenditures eligible for the tax credit include the cost of the equipment and associated design; construction costs; and installation costs less any discounts, rebates, advertising, installation-assistance credits, name-referral allowances or other similar reductions. The allowable credit may not exceed 50% of a taxpayer's state tax liability for the year, reduced by the sum of all other state tax credits. Single-family homeowners who purchase and install a qualifying renewable-energy system must take the maximum credit amount allowable for the tax year in which the system is installed. If the credit is not used entirely during the first year, the remaining amount may be carried over for the next five years.
For all other taxpayers, the credit is taken in five equal installments beginning with the year in which the property is placed in service. If the credit is not used entirely during these five years, the remaining amount may be carried over for the next five years. The credit can be taken against franchise tax, corporate tax, income tax, or in the case of insurance companies, against the gross premiums tax. SB 3 of 2007 amended North Carolina's renewable energy tax credit statute to allow a taxpayer who donates money to a tax-exempt nonprofit to help fund a renewable energy project to claim a tax credit. The donor may claim a share of the credit -- proportional to the project costs donated -- that the nonprofit could claim if the organization were subject to tax. HB 2436 of 2008 applied this same mechanism to donations made to units of state and local governments. Other rebates and incentives may be available to those building greener and more efficient homes and buildings. Get more information on Green Building Incentives and Rebates.