South Dakota has no programs at the current time for financial assistance in installing solar energy systems, with the exception of a property tax exemption. Please review the federal guidelines below for cost-saving programs.
Summary of South Dakota Incentive Programs
•Federal Tax Credit 30%
Federal grants
When the federal government signed into law the American Investment and Recovery Act of 2009, it made more incentives available for alternative energy sources. Among the new programs are several grant options. One is the Renewable Energy Grant, which gives 30% of the basis of the property for new construction in a commercial, industrial, or agricultural facility utilizing solar power. Another program, named REAP (Rural Energy for America Program) targets buildings such as schools, government buildings, and public power entities, and entitles them to a 25% grant when utilizing solar energy. Additionally, the Tribal Energy Grant Program provides financial assistance, technical assistance, education and training to tribal governments in varying amounts.
Federal tax credits
Our federal government offers many tax credits for installing and using solar energy systems. Chief among these is the 30% credit of costs expended to install solar equipment in both residences and businesses, through the Residential Renewable Energy Tax Credit and Business Investment Tax Credit. There is additionally a 30% tax credit (Qualifying Advanced Energy Project Investment Tax Credit) available for costs incurred during the establishment or expansion of a facility involved in manufacturing solar energy systems or components.
Additional tax incentives
Many public utility companies around the country provide rebates for installing solar systems. However, due to the federal programs Residential Energy Conservation Subsidy Exclusion (Corporate) and Residential Energy Conservation Subsidy Exclusion (Personal), these subsidies are 100% non-taxable. Businesses are provided with a 50% bonus depreciation schedule for solar property under the Modified Accelerated Cost-Recovery System (MACRS) + Bonus Depreciation (2008-2009). Finally, there is also a program named Renewable Energy Production Incentive (REPI) which provides for an incentive of 2.1¢ per kWh for qualifying governments, municipal utilities, and native corporations.
Financing Programs
CREBS (Clean Renewable Energy Bonds) are issued by qualifying governments and utilities to finance solar energy projects, and buyers are then paid back only the principal amount, also receiving tax credits in lieu of interest. FHA and VA both offer Energy-Efficient Mortgages, allowing borrowers to include up to 100% of the system costs in their loan. QECBS (Qualified Energy Conservation Bonds) differ from CREBS only in that they are allocated specifically for large local governments with populations over 100,000. The U.S. Department of Energy – Loan Guarantee Program targets businesses, state and local governments, and institutions with project costs over $25 million. Similarly, USDA – Rural Energy for America Program (REAP) Loan Guarantee provides loans up to $25 million for business and agricultural use.
Additional information can be found by visiting the DSIRE:Database of State Incentives for Renewables & Efficiency
