Definition of Energy Property
For the purpose of tax credits, energy property encompasses a range of technologies and implementations designed to improve energy efficiency or generate energy through alternative means. These include:
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Solar Energy Equipment: Used to generate electricity or to heat, cool, or provide hot water for a structure.
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Geothermal Energy Equipment: For production, distribution, or usage, provided it is utilized before the electrical transmission stage.
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Qualified Fuel Cell and Microturbine Property: Developments that involve fuel cells or microturbines for energy production.
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Combined Heat and Power Systems: Utilizing surplus heat from electricity generation for additional purposes.
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Qualified Small Wind Energy Property: Harnessing wind energy on a smaller scale.
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Thermal Energy Sources: Systems using the ground or groundwater for heating or cooling structures.
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Waste Energy Recovery: Capturing and reusing energy that would otherwise be lost.
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Energy Storage Technologies and Microgrid Controllers: Enhancing energy management capabilities.
An essential criterion is that these properties must be constructed, reconstructed, or erected by the taxpayer, or acquired in such a manner that the original use begins with the taxpayer. Furthermore, energy properties must adhere to performance and quality standards as prescribed by regulations applicable at the time of property acquisition.
Qualifying Items Under Energy Property
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Solar Panels and Equipment: For electricity generation, heating, or cooling.
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Geothermal Heat Pumps: Enhancing energy efficiency through geological processes.
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Fuel Cells and Microturbine Systems: Advanced systems for decentralized energy generation.
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Wind Turbines: For harnessing wind energy.
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Energy Storage Systems: Including batteries and other technologies for energy savings.
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Biogas Property: Utilizing biological substrates to generate energy.
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Microgrid Infrastructure: Improving energy management and reducing dependency on primary grids.