Many people ask about grants, loans, tax credits, or other financial incentives that may be available to assist Michigan residents, businesses, and institutions interested in pursuing energy efficiency or renewable energy systems. The following Frequently Asked Questions provide answers to many of your questions and is organized as follows.
Homeowners
Businesses
Public Agencies
Non-Profit Organizations
Q. Are state or federal grants available for homeowners?
A. Not at this time. You can periodically check the "News and Information" box on our web page www.michigan.gov/energyoffice for announcements on new programs. Low-income persons are eligible for weatherization services. More information on this program is available at http://www.michigan.gov/fia/0,1607,7-124-5452_7124_7211-15408--,00.html .
Q. Are loans available for homeowners?
A. Yes, some Michigan utilities offer loans to their customers.Xcel Energy offers their customers low interest financing for home energy efficiency projects. For additional information go to http://www.xcelenergy.com/XLWEB/CDA/ . Energy improvement mortgages are a type of loan available from some Michigan mortgage companies. Energy efficiency improvements are rolled into refinancing. See the next Q and A.
Q. What is an Energy Efficient Mortgage?
A. An energy efficient mortgage allows home buyers to get an "income stretch," i.e. the lender can increase the debt-to-income ratio by as much as 2% or more from a typical ratio of 28%. With an energy efficient mortgage, the home buyer is able to buy "more house," while having lower payments because the energy cost savings are greater than the increases in the mortgage payment. The Federal Housing Administration, the Veterans Administration, Fannie Mae and Freddie Mac sponsor energy efficient mortgages. An energy improvement mortgage is a type of energy efficient mortgage that finances cost-effective improvements in an existing home. The total expended on energy efficiency is rolled into the mortgage loan. For additional information go to http://www.michigan.gov/cis/0,1607,7-154-25676_25692-42507--,00.html
Q. Are tax credits available for homeowners?
A. Yes. The Energy Policy Act of 2005 provides new federal tax credits for energy efficiency improvements, solar systems, fuel cells, and alternative fuel vehicles. See FAQ's Energy Policy Act of 2005 for more specifics.
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BUSINESSES
Q. Are grants available for home builders?
A. Yes. Each year the Energy Office awards five grants up to $8,000 to licensed builders to build and promote energy efficient ENERGY STAR homes. Details are available at http://www.michigan.gov/cis/0,1607,7-154-25676_25692-98333--,00.html . If you are having a house built, you can work with your builder and encourage him to apply for one of the five grants. Builders are also eligible for reimbursement for the cost of a home energy rating up to $300 under certain circumstances: 1) an ENERGY STAR home in a local Parade of Homes or 2) an ENERGY STAR home that will be used as a model home for at least six months. The Energy Policy Act of 2005 includes tax credits for builders for new homes. See FAQ's Energy Policy Act of 2005 for more specifics.
Q. Are state grants available for other types of businesses?
A. The Michigan Public Service Commission has a grant program called the Low-Income and Energy Efficiency Fund. Requests for Proposals are issued from time to time and businesses are eligible to apply. Check the MPSC Web site for details, athttp://www.michigan.gov/mpsc/0,1607,7-159-16370_27289---,00.html
Q. Are federal grants available to businesses for energy projects?
A. Yes, but only in response to specific Requests for Proposals. For additional information, go to https://e-center.doe.gov/iips/busopor.nsf/ViewMenu?ReadForm . Information on R&D funding for Green and Clean Technologies including energy efficiency can be found at http://www.sbam.org/resource/energystar/eco/inn.html . There is a specific grant program for agricultural producers and rural small businesses. Additional information can be found at: http://www.rurdev.usda.gov/rbs/farmbill/apply.html.
Q. Are loans available for businesses?
A. Yes. Energy efficiency and renewable energy measures are an effective way to prevent pollution. Small Business Pollution Prevention Loans are available through the Michigan Department of Environmental Quality. Loans up to $300,000 at an interest rate of 5% or less are available to businesses with fewer than 500 employees. See: http://www.michigan.gov/deq/0,1607,7-135-3307_3515_4144---,00.html
Q. Are state tax incentives available for businesses?
A. Yes, for qualifying equipment. Under Michigan's NextEnergy program (http://www.nextenergy.org ), alternative energy property can be exempt from business and personal property taxes. Alternative energy property can include energy systems using any of the following: fuel cells, solar photovoltaic cells, solar thermal systems, wind energy, combined heat and power (CHP), micro- or mini-turbines, Stirling engines, certain kinds of batteries or electricity storage systems, and certain kinds of clean fuel energy systems. This list is not all-inclusive. Be sure to see the documents on the Michigan Economic Development Corporation (MEDC) website in order to determine whether the type(s) of equipment you have in mind might qualify. In addition, businesses can claim a credit against their Single Business Tax liability. For additional information, see: http://medc.michigan.org/AdvMfg/Reports/ . Questions can be directed to Vince Nystrom, MEDC, at (517) 241-5898.
Q. Are federal tax incentives available for businesses?
A. Yes, for qualifying equipment. The federal government offers a 5-year (as opposed to 20-yr) accelerated depreciation schedule for solar equipment. Eligible technologies are photovoltaic and solar thermal systems. In addition, a federal tax credit up to 30% can be taken on investment or purchase and installation for photovoltaic and thermal solar systems. For additional information, go to http://www.irs.gov. The Energy Policy Act of 2005 includes new tax incentives for businesses for alternative fuel vehicles, production of biodiesel and ethanol, alternative fuel refueling property, fuel cells, microturbines, energy efficient commercial buildings, new manufactured homes, new homes, and the manufacture of efficient dishwashers, clothes washers, and refrigerators. See FAQ's Energy Policy Act of 2005 for more specifics.
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Q. Are state grants available for public agencies ?
A. Yes, but only in response to specific Requests for Proposals. Unsolicited proposals are not accepted. (See www.michigan.gov/energyoffice and the "News and Information" box for new funding opportunities.) Also public agencies can apply to the Low-Income and Energy Efficiency Fund administered by the Michigan Public Service Commission. Check the MPSC Web site for Requests for Proposals athttp://www.michigan.gov/mpsc/0,1607,7-159-16370_27289---,00.html
Each year the Energy Office offers Community Energy Project Grants to public and non-profit organizations. These grants are up to $6,000 and can be used for solar demonstrations, statewide energy conferences and events, bioenergy/biofuels education, green commuting projects, and green building projects. Project categories can change from year to year.
Q. Are federal grants available for public agencies ?
A. Yes, but only in response to specific Requests for Proposals. For additional information, go to https://e-center.doe.gov/iips/busopor.nsf/ViewMenu?ReadForm .
Q. Are grants or incentives available for public institutions?
A. Yes. Incentives are often available for building efficiency certifications and energy education in schools. These are limited time offers and will be published on the Energy Office website (www.michigan.gov/energyoffice), as available. State government departments can capture a percentage of avoided energy costs due to energy management actions through PA 122. The departments can have a portion of their avoided energy costs "certified" by the State Energy Office so they can be used for additional energy projects in state facilities. State departments can also access an alternative financing tool for funding state facility energy projects - energy performance contracting. Procurement of state facility energy performance contracts is handled through the MI Department of Management & Budget, Acquisition Services Division. Details are available at http://www.michigan.gov/eormes.
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Q. Are state grants available for non-profit organizations?
A. Yes, but only in response to specific Requests for Proposals. Unsolicited proposals are not accepted. (See www.michigan.gov/energyoffice and the "News and Information" box for new funding opportunities.) Also, non-profit organizations can apply to the Low-Income and Energy Efficiency Fund administered by the Michigan Public Service Commission. Check the MPSC Web site for Requests for Proposals athttp://www.michigan.gov/mpsc/0,1607,7-159-16370_27289---,00.html
Each year the Energy Office offers Community Energy Project Grants to public and non-profit organizations. These grants are up to $6,000 and can be used for solar demonstrations, statewide energy conferences and events, bioenergy/biofuels education, green commuting projects, and green building projects. Project categories can change from year to year.
Q. Are federal grants available for non-profit organizations?
A. Yes, but only in response to specific Requests for Proposals. For additional information, go to https://e-center.doe.gov/iips/busopor.nsf/ViewMenu?ReadForm
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November 1, 2005
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