Alternative Energy Development - Green Energy Initiatives

Biomass energy converts organic feedstocks into renewable power via combustion, gasification, and anaerobic digestion, enabling CHP systems, grid integration, carbon-neutral generation, improved thermal efficiency, and dispatchable biofuels for resilient electrical infrastructure.

What Is Biomass Energy?

Biomass energy produces electricity from feedstocks through combustion or digestion, enabling CHP and grid reliability.

✅ CHP raises electrical efficiency to 70% with heat recovery

✅ Gasification feeds syngas to turbines or SOFC for power

✅ Dispatchable output supports frequency and voltage stability

Biomass energy comes from biomass feedstock (crops and residues, farm animal wastes, industrial wood, etc.). The heat from this substantial renewable resource can generate electricity, fuel and other forms of energy. It has been estimated that just one eighth of the total biomass energy produced annually could provide all of humanity’s current demand for energy. For a deeper overview of how biomass fits within the clean energy landscape, see this guide on biomass renewable energy and its practical applications today.

Some forms of biomass fuels (or biofuels), derived from biomass feedstock, can be solid, liquid, or gas. Kitchen scraps, sewage, the leftovers of the food processing industries, paper, sawdust, and lawn clippings are some of the available biomass energy sources. Biomass energy has received a lot of attention because an opportunity to convert waste into something very valuable has presented itself. These pathways are often discussed alongside other forms of alternative energy that leverage different feedstocks and conversion methods.

Biomass Energy – How can we use it?

Biomass energy can be converted to generate electricity, fuel vehicles and heat buildings using biofuel technologies. At the moment, biomass energy sources used in power plants include agricultural and farm residues, food processing residues, wood residues and methane gas from land fills. Biomass energy producers hope to significantly expand the supply of biomass energy by using trees and grasses as well. In power markets, biomass can contribute to renewable electricity portfolios alongside wind and solar resources.

Currently, there are more than 350 biomass energy plants generating 7,000 megawatts of biomass power in the United States. The producers who own these plants are quite diverse; they range from the electrical utilities, independent power producers, the wood manufacturing industry, and the pulp and paper industry. Such facilities are part of broader trends in renewable power generation that emphasize reliability and grid integration.

Biomass energy is considered a renewable energy source because it can replenish itself (regrown), unlike fossil fuels such as coal and oil, which when used, are gone. And, unlike coal and oil, biomass energy is an alternative energy source because it doesn’t hurt the environment with harmful chemicals, such as carbon dioxide, which cause greenhouse gas emissions (GHG). Using renewable biomass resources not only reduce greenhouse gases, but they also reduce air pollutants and landfill wastes. This classification aligns with definitions of alternative energy that prioritize low emissions and resource sustainability.

As policies evolve, many jurisdictions frame biomass within broader renewable alternative energy strategies that support decarbonization goals.

Biomass Energy in Today’s Marketplace

Within the spectrum of renewable energy sources, biomass competes and collaborates with wind, solar, and hydro depending on local resource availability.

• High costs in handling and transportation, as well as high moisture content, have long outweighed the low price of biomass energy feedstocks. Fuels that are filled with moisture are hard to burn properly and heat release is slow and hard to control. However, fuel upgrading options, such as pelletization and drying remedy this situation, thus making biomass energy more economically attractive.
• Biomass energy can also make be useful in blending and co-firing applications with coal because of the low SO2, NOx, and metals emissions from biomass energy fuels, and their CO2 neutral status.

Biomass Energy – Benefits of Cogeneration

Cogeneration, the practice of producing both electricity and useful heat, is a great way of improving energy efficiency. Some sawmills, for example, use a lot of heat from boilers powered by biomass energy to supply energy to their kiln-drying operations. But any extra heat can help gasify biomass energy fuels so they can be used in a gas turbine, which is more efficient than a simple steam boiler. Additional savings can be produced by using combined cycle technology, which takes additional waste heat from the gas turbine to give power to a steam-driven turbine.

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Alternative energy solutions leverage renewables like solar PV and wind turbines, with battery storage, smart grids, power electronics, and advanced inverters enabling grid integration, microgrids, load balancing, and high-efficiency electrical systems.

What Are Alternative Energy Solutions?

Systems using renewables, storage, and power electronics to provide efficient, reliable, grid-integrated electrical power.

✅ Power electronics: MPPT, inverters, converters for grid-tied PV and wind.

✅ Energy storage and EMS for frequency regulation and peak shaving.

✅ Smart grids, microgrids, protection, SCADA, and IEC 61850.

Why are alternative energy solutions so important? Fossil fuels, such as coal and oil, continue to contribute to the ever-growing pollution in the environment by producing carbon dioxide and other harmful chemicals, which causes further damage to Earth's atmosphere by increasing the hole in the layer of the upper atmosphere (the ozone layer). The ozone layer, which protects Earth's inhabitants from the sun's radiation, prevents the snow in the Northern and Southern atmospheres from melting. These increased atmospheric temperatures, known as global warming, is a concern for governments all over the globe because flooding could occur on such catastrophic levels (much of North America, Europe and other parts of the world would be under water and countless lives would be lost). So, many of the world's nations are rallying together to reduce their fuel consumption and dependency on fossil fuels and find other alternative energy solutions. For readers new to the topic, see this overview of what constitutes alternative energy to understand how these technologies differ from conventional fuels.

According to the U.S. Department of Energy, fossil fuels currently give the U.S. more than 85 per cent of all consumed electric power and almost all of consumed transportation fuels. DOE points out that the likelihood that America's reliance on fossil fuels will continue to increase over the next two decades as the economy expands--even with aggressive development and deployment of new alternative energy technologies. In parallel, DOE and industry roadmaps highlight the role of renewable alternative energy in moderating long-term demand growth.

What does this mean? Energy is essential to economic growth. Without adequate energy supplies, a world population of six to ten billion people would not be possible. Every human life and every sector of the economy requires energy and even the most basic needs of humanity (such as food and water) could not be supplied without adequate energy supplies. Diverse renewable energy sources can help meet these fundamental needs while reducing environmental and supply risks.

For any alternative energy solution to be successful in today's marketplace, it must provide more energy than other large energy sources (fossil fuels and natural gas), which presents a formidable challenge. Why? Most of today's energy sources are already considered difficult to satisfy current demand. The difficulty doesn't exist in the resource being too small, but the challenge is to maintain a high rate of growth necessary to keep up with demand. How is this to be done? Here are some alternative energy solutions. For a broader primer on technology categories, explore the principal forms of alternative energy described by industry educators.

Alternative Energy Solutions - Hydro Power

Hydroelectricity is a well-established and cost-effective form of alternative energy. This alternative energy solution has helped support energy-intensive industries like rely on cheaper forms of electricity. Hydro Electricity also plays an important role in energy storage, but, hydro energy's potential won't be enough to power the global economy on hydroelectricity. However, hydro-electric energy projects will continue to be deployed wherever the resource is readily available. Readers can compare hydro with other options by reviewing key alternative energy sources and their typical applications.

Alternative Energy Solutions - Solar Power

Solar energy hasn't gone large scale mainly due to cost and distribution issues, but that hasn't stopped solar energy companies from making investments. In fact, recent expansions have resulted in 265 megawatts of energy and more than two billion dollars of investment in the U.S. economy. When cost isn't such a major factor, it's expected that solar energy will play a larger role in the world economy. Solar energy, particularly in thee electricity sector, will have to become much more cost efficient before it can compete with other energy resources. While there is no obvious floor to the price of solar energy, progress in the last few decades has been slow. Another factor affecting cost is electricity storage, which, at present, is not currently available to meet immediate high energy demands. But, if cost becomes roughly three times cheaper than other electricity sources that satisfy immediate demand, then solar energy stands a chance of becoming a major energy source. It's expected that prices will decrease dramatically with emerging solar technologies, such as photovoltaic cells. It remains be seen, however, if these reductions can give solar energy the competitive edge in the world economy. For technology pathways and case studies, see this guide to alternative energy solar power and its emerging cost trends.

Alternative Energy Solutions - Wind Power

Wind energy is helping many nations meet their ever-growing energy demands. Today, wind energy provides the U.S. with enough electricity to power over 9.7 million American homes. And, according to the National Renewable Energy Laboratory (NREL), there is a potential of 37 trillion kilowatt-hours of electricity that could be used to power the U.S. annually——nearly 10 times the country’s existing power needs. At the moment, there are over 400 American manufacturing plants that build wind components including blades, towers and other major turbine components. Plus, new wind energy manufacturers are currently coming online, being announced or expanding (over 100 since 2007). However, wind energy requires further development in technologies before they are ready to operate at full scale. Grid planners often analyze how alternative energy power integrates with reliability standards and transmission upgrades.

Alternative Energy Solutions - Geothermal Power

The geothermal potential is very large. At the moment, the technology for this alternative energy solution is limited to special locations (such as Iceland, Kenya and locations in California) with very steep thermal gradients, resulting in very large temperature differentials between the surface and the geological reservoir. For the time being, many of the possible energy resources are simply not large enough to operate at the scale necessary to satisfy a substantial fraction of the world’s energy demand. In some cases, like wind energy, the locations are large enough, but raise serious questions about the environmental impact of large-scale deployment.

What is the best alternative solution?

Governments continue to strive to find one energy solution that can power the world, but it might be that a collaboration of alternative energy solutions is best to saving the world.

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Alternative energy geothermal delivers baseload renewable electricity via hydrothermal reservoirs, binary-cycle ORC turbines, and EGS, using heat exchangers, generators, and power electronics for efficient grid integration, low emissions, and stable capacity.

What Is Alternative Energy Geothermal?

It converts subsurface heat to electricity via steam or ORC cycles, generators, and grid-tied power electronics.

✅ ORC and flash steam cycles drive turbines and synchronous generators

✅ Power electronics, inverters, and transformers enable grid integration

✅ EGS, drilling, and heat exchangers expand capacity with low emissions

Geothermal energy comes from heat stored beneath the Earth's surface. Also known as thermal energy, geothermal is considered to be an alternative energy because it produces very little greenhouse gas emissions (GHG), which harm the Earth once it's generated into electricity. Geothermal wells release these greenhouse gases, but not nearly as much as its fossil fuel counterparts oil and coal. For context on how this resource fits within energy policy, see our overview of what is alternative energy to understand key definitions.

Alternative energy geothermal is a product from Earth's original formation: radioactive decay of minerals thanks to volcanic eruptions and solar energy digested and stored from the Earth's surface. Thermal energy is produced from the continuous conduction of heat that emanates from the Earth's core that moves upward to the surface. This process is known as the geothermal gradient. If you've ever had the opportunity to bathe in hot springs, you'll be glad to know that the thermal heat comes from beneath the Earth. When comparing technologies, placing geothermal alongside other alternative energy sources highlights its base-load role and unique subsurface dependence.

Alternative Energy Geothermal - How can we use it?

In practice, many integrated alternative energy systems combine geothermal with insulation and smart controls to maximize year-round efficiency.

Energy producers have been able to convert alternative energy geothermal into electricity. These same producers have high hopes for geothermal energy because power can be generated 24 hours a day, unlike other intermittent renewable energies, like wind energy and solar energy. This contrasts with the variability seen in resources such as solar power during cloudy periods or at night.

Geothermal energy can also be used to heat pumps or for other direct uses such as cooling and heating buildings. The Earth's crust temperature a few feet below is buffered to a constant seven to 14 °C (45 to 58 °F), so a liquid can be pre-heated or pre-cooled in underground pipelines, providing no-cost cooling during the summer, and with a heat pump, heating during the winter months. Other direct uses include aquaculture, agriculture (greenhouses), and industry. Project planners often consult practical alternative energy solutions to evaluate lifecycle costs and integration pathways.

Alternative Energy Geothermal - How is geothermal electricity produced?

Within the broader family of forms of alternative energy, geothermal distinguishes itself through high capacity factors and minimal fuel risk.

Geothermal energy uses Earth's natural heat to generate electricity. Geothermal plants are built on or near reservoirs that contain Earth's hydrothermal resources (underground steam and heated water). The heat mining process begins when drills penetrate these reservoirs to obtain the steam and water to power electricity-generating turbines.

There are different ways to produce alternative energy geothermal. Two popular processes include:

• Flash Steam Geothermal water with temperatures exceeding 350°F is extracted under extremely high pressure by flash steam plants. When the heated water surfaces, a sudden pressure reduction causes some of the hot water to flash off as steam. This flashed steam operates a generator, at which time, the extracted steam and water are reintroduced into the geothermal reservoir.
• Dry Steam Dry steam is extracted directly from under the earth’s surface by dry steam plants to operate a generator. When the steam condenses into water, it is then reintroduced into the alternative energy geothermal reservoir.

   

  Alternative Energy Geothermal - Is Geothermal Energy a Sustainable Energy Source?

  Alternative Energy Geothermal is considered to be sustainable, cost-effective, great for the environment and reliable. Recent advances in technology have expanded alternative energy geothermal applicable uses (such as home heating), which could lead to global exploitation. However, advances in technology, cost, government incentives and implementation of geothermal power projects will determine if alternative energy geothermal will become a viable global competitor.

  Alternative Energy Geothermal - Is Geothermal Energy a Renewable Energy Source?

  Scientific evidence shows that geothermal sites can provide heat for many decades, but eventually these specific locations cool down, which brings into question if alternative energy geothermal truly is a renewable energy source, since renewables are defined as green energy sources that never deplete. Understanding how geothermal fits into renewable alternative energy frameworks can help policymakers set realistic targets.

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Alternative energy grants fund renewable energy R&D, power systems upgrades, and grid modernization, supporting solar, wind, microgrids, battery storage, high-efficiency inverters, and electrification projects for utilities, manufacturers, and engineers, focused on decarbonization and smart grid.

What Are Alternative Energy Grants?

Grants that fund renewable power systems, grid upgrades, and storage for electrical engineering projects.

✅ Funds power electronics, inverters, and grid-integration R&D

✅ Supports microgrids, DERs, and smart grid reliability projects

✅ Covers feasibility studies, prototypes, and pilot deployments

Alternative energy grants - Wind, solar, geothermal and other alternative energy soures are the new "in" to replace forms of energy that harm the environment such as fossil fuels, so both Canadian and the U.S. governments are giving alternative energy grants (free conditional money) to individuals, businesses and local governments to promote the use and development of alternative energy sources. Here are three alternative energy grants currently offered by the U.S. government. For broader context on the field, the overview at what is alternative energy explains key terms and categories clearly.

Alternative Energy Grants - Energy Efficiency and Conservation Block Grant (EECBG) Program

These alternative energy grants help eligible entities in beginning their conservation and energy efficiency strategies. For those interested in applying for these alternative energy grants, they must have reduced their fossil fuel emissions, reduced total energy usage and improved energy efficiency within the company. Furthermore, those eligible must develop and implement an energy efficiency and conservation strategy with the assistance of a third-party technical consultant. Also, eligible entities must conduct regular residential and commercial building energy audits to monitor results and financial incentive programs (loan programs, rebate programs, waive permit fees) with the goal of improving energy efficiency must be in place. Other requirements are also required to be eligible for this alternative energy grant. To identify complementary rebates and policy tools, agencies can review alternative energy incentives relevant to their jurisdiction for alignment with EECBG goals.

Alternative Energy Grants - State Energy Program

Ultimately, provinces and states are expected to lower their overall fossil fuel carbon emissions so that the use of alternative energy sources can become more prevalent. Financial support, in whole or in part, may be provided for salaries, materials, and supplies, equipment, travel, publication costs, and services required for deployment of alternative energy activities and initiatives. The states energy program goes to competing states for funding to implement activities relating to a number of programmatic areas such as building codes and standards, alternative fuels, industrial efficiency, building efficiency, and alternative energy technologies. Many states layer alternative energy tax credits on top of SEP funds to catalyze private investment.

Alternative Energy Grants - Rural Energy for America Program (REAP)

The REAP program provides alternative energy grants to rural small businesses & agricultural producers for the purchase & installation of alternative energy systems in rural areas. Alternative energy grants are limited to 25 per cent of the project cost or $500,000 – whichever is less. Alternative energy grant applications of $20,000 or less are greatly favored in the competitive, selection process. Projects needing larger grants can improve their chances by simultaneously seeking a REAP guaranteed loan. For the loan seekers, the details are the same as the aforementioned alternative energy grant, but provides 60 to 85% per cent loan guarantees to commercial lenders financing such projects. Loans up to $25 million can be guaranteed. Combination grant and guaranteed loan assistance up to 75 per cent of total project cost; such “combo” proposals may improve a project’s access to grant assistance and speed approvals. Prospective applicants can benchmark typical capital and O&M figures using resources on alternative energy cost to prepare stronger pro formas.

Case studies of farm-scale solar, wind, and efficiency upgrades in the alternative energy projects library illustrate successful REAP financing structures.

Alternative Energy Grants - State Energy Special Projects

The State Energy Program aims to develop and deploy energy efficiency and alternative energy technologies and practices. The State Energy Program (SEP) makes it possible for states in the U.S. to design and carry out energy efficiency and alternative energy programs tailored to their State-specific needs, while contributing to national energy priorities. The State Energy Program enables the States to address both national energy initiatives and local energy priorities through two funding mechanisms: alterntive energy formula grants and Special Projects grants. States utilize these funds to design and implement energy projects tailored to meet community needs, economic conditions, individual energy situations, and climactic variations. SEP Special Projects funds are awarded on a competitive basis to States from each of the four end-use sectors (buildings, industrial, power technologies, and transportation) and the Federal Energy Management Program (FEMP) for cost-shared technology projects. Special Projects often accelerate alternative energy development by targeting pre-commercial demonstrations and regional testbeds.

For program designers seeking cross-sector approaches, curated alternative energy solutions can inform competitive proposals and stakeholder engagement plans.

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Alternative Energy Solar Power converts sunlight via photovoltaics into electricity using PV modules, inverters, MPPT, and battery storage for grid-tied systems, microgrids, and off-grid resilience, improving efficiency, reliability, and decarbonization.

What Is Alternative Energy Solar Power?

A renewable electrical system converting solar irradiance to AC via PV modules, MPPT inverters, and optional storage.

✅ PV arrays generate DC; power electronics regulate voltage and current.

✅ Inverters with MPPT perform DC–AC conversion, grid sync, and protection.

✅ Battery storage and EMS enable peak shaving, backup, and microgrid control.

Alternative energy solar power is, perhaps, the first energy source that comes to mind when most people think of alternative energy sources, but — unlike wind — alternative energy solar power is still a long way from being considered a mainstream source of electricity generation. In fact, it accounts for less than one per cent of the world’s electricity production. For readers new to the topic, what is alternative energy clarifies key definitions and the role solar plays among emerging options.

Two main ways to harness the sun's energy to generate alternative energy solar power include: photovoltaic (PV), where solar cells directly convert sunlight into electricity, and solar-thermal power. PV is a proven alternative energy solar power technology that is most appropriate for small-scale applications to provide heat and power to individual houses and businesses. Sunlight falls on a layer of semiconductors, which excites electrons. This, in turn, creates an electrical current that can be transmitted via electrical cables to serve useful applications. Alternative energy solar power solar PV cells are already cost effective for powering houses and businesses in some regions. As with alternative energy wind power, costs have reduced in the past few years thanks to technological developments. But, unlike alternative energy wind power, however, large scale electricity production using alternative energy solar power costs about 22 cents per kilowatt-hour, significantly more expensive than its fossil fuel generation competitors and nuclear power. Comparative cost and performance data across technologies are summarized in alternative energy power, which details where PV is most competitive.

Solar-thermal energy is a completely different technology. It collects and concentrates the sun's rays to heat up fuel such glycol or any other liquid that heats up easily. The heat trapped within this medium is then used transferred through a heat exchanger so that heated water can be used for regular hot water applications like bathing and space heating and heating swimming pools, etc. Fossil fuels are sometimes used as a back-up to heat the water in the boiler if the sun is not shining and cannot heat the system. There are three different methods for concentrating the sun’s rays:

• Parabolic Trough — This method uses long, parallel rows of glass mirrors in the shape of a trough to concentrate the sun’s rays directly at the “absorber tube," which is often filled with oil, to achieve maximum effect.
• Power Tower — Similar in principle to parabolic-trough technology, the mirrors are placed in a circular pattern. At the center of the circle is a tower, at the top of which is a receiver filled with water, air, liquid metal or molten salt that moves to a power block and is used to power a steam turbine.
• Parabolic Disk System — In this system, dishes rather than troughs are used to concentrate the power of the sun.

To see how these concentrating approaches integrate with storage, controls, and grid interconnection, alternative energy systems offers design-level guidance for practitioners.

Advantages of Alternative Energy Solar Power

In spite of its cost versus other sources of energy, alternative energy solar power is attracting interest due to the following:

• Alternative energy solar power makes use of a renewable natural resource that is readily available in many parts of the world.
• The process used to generate alternative energy solar power is emission-free.
• Costs have greatly reduced thanks to technological advances in solar power technlogy to a point that it can compete with fossil fuel alternatives in specific circumstances.
• The technology is scalable in that it can be used for domestic heating purposes or on a larger scale for commercial electricity generation, as solar water heaters are an established technology, widely available and simple to install and maintain.

For a deeper dive into real-world performance benefits, case studies in advantages of solar power highlight emissions reductions and lifecycle savings.

Disadvantages of Alternative Energy Solar Power

The biggest barriers to increasing alternative energy solar power generation are the cost, the amount of land required for large-scale electricity production, and the intermittent nature of the energy source. In terms of the latter, thermal systems do not work at night or in inclement weather. Storage of hot water for commercial or domestic use is simple because only insulated tanks are needed, but further technology advancements are required to improve storage for the higher-temperature liquids required to generate electricity on a large scale and storage of the electricity itself. Emerging roadmaps in alternative energy solutions discuss thermal storage media and hybrid configurations that mitigate intermittency challenges.

Outlook for Alternative Energy Solar Power

Although alternative energy wind power is more economical and has been more widely adopted for large-scale power production than solar energy, solar energy is the most flexible in scale and application. It also is widely available and an environmentally benign source of alternative energy. Broader market drivers and renewable policy trends are tracked under renewable alternative energy, providing useful context for long-term solar adoption.

It is currently a $7 billion per year business that is growing at 40 per cent per annum. As part of the wider clean-energy portfolio, the taxonomy in forms of alternative energy situates solar alongside complementary technologies.

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Alternative energy incentives accelerate grid decarbonization via tax credits, rebates, net metering, and grants for solar, wind, storage, power electronics, microgrids, and smart grid upgrades, reducing LCOE and supporting EV charging infrastructure.

What Are Alternative Energy Incentives?

Incentives—tax credits, rebates, net metering—finance clean electrification, grid upgrades, and storage to cut costs.

✅ Lowers LCOE for solar PV, wind, and battery storage projects

✅ Supports grid modernization, smart inverters, and microgrid controls

✅ Enables EV charging, demand response, and power electronics R&D

Alternative energy incentives encourage companies to pursue non-fossil-fuel energy as a way to consume power. Different countries have different alternative energy incentive programs available for businesses and residences through country, state/province, or municipality levels. However, in this article, alternative energy incentives for business take the center focus. For background on definitions and technologies, see this overview of what constitutes alternative energy and typical market drivers.

In the U.S., two alternative energy incentives available are the investment tax credit and the production tax credit (both can be claimed on a taxpayer’s federal income tax return). A third incentive is a grant program that gives businesses opportunities to receive cash payments from the government for purchasing alternative energy property. Detailed federal and state guidance on credits is summarized in this resource on renewable energy tax credits for common project types.

The investment tax credit, the energy production tax credit or the federal energy grant cannot be claimed in tandem, meaning that a taxpayer can only choose one of these alternative energy incentives. Obviously care will need to be taken in deciding which alternative energy incentive will be best for a specific taxpayer.

Many businesses model total installed cost and depreciation using these alternative energy cost references before selecting an incentive.

While incentives are available They are available for both businesses and individuals; and they can be found at the federal, state and local levels, as well as with utility companies and product manufacturers. A concise primer on renewable alternative energy helps stakeholders align technologies with applicable programs.

1. Alternative Energy Incentives - Investment Tax Credit

A taxpayer can claim a tax credit equal to thirty percent of the cost of qualified eligible energy property placed in service. For credit calculations and eligibility nuances, consult this guide to alternative energy tax credits and common compliance pitfalls.

Property eligible for this alternative energy incentive are:

• Solar property,
• Geothermal property,
• Qualified fuel cell property,
• Stationary micro turbine property,
• Combined heat and power system property,
• Qualified small wind energy property, and
• Geothermal heat pump property

  The federal tax credit is not considered to be taxable income; however, the cost basis of the energy property will need to be reduced by one-half of energy credit claimed. The investment tax credit is also subject to an alternative minimum tax limitation. The credit cannot reduce a taxpayer’s regular tax below the taxpayer’s alternative minimum tax. Any unused credit can be carried back one year and forward twenty years. Case studies of successful deployments in solar, CHP, and wind are profiled among these alternative energy projects to illustrate basis and credit interactions.

  A percentage of the investment tax credit will have to be recaptured if the energy property is disposed of within five years of being placed in service.

2. Alternative Energy Incentives - Production Tax Credit

A taxpayer can claim a tax credit equal to a percentage (between .0075 cents and 2.1 cents per kilowatt hour) of energy generated from qualified energy resource property placed in service. The credit can be claimed for a ten year period starting with the date that the energy resource property is placed in service.

Eligible energy resources for this alternative energy incentive include:

• Geothermal or solar energy,
• Wind,
• Open-loop biomass,
• Closed-loop biomass,
• Marine and hydrokinetic renewable energy

   

• Small irrigation power,
• Qualified hydropower production, and,
• Municipal solid waste

  Unlike the investment tax credit, the cost basis of energy property does not have to be reduced by the production tax credit claimed. In addition, for facilities that generate electricity, there is no alternative minimum tax credit limitation for the first four years that a facility is placed in service.

  Similar to the investment tax credit, an unused energy credit can be carried back one year and forward twenty years.

3. Alternative Energy Incentives - Grant For Specific Energy Project Investments

This grant program offers cash payments to eligible taxpayers who place in service specific energy properties. Only taxpayers that are in a trade or business can qualify for this grant, which means that a residential energy-efficient property does not qualify. Application procedures and deadlines are outlined in these alternative energy grant resources for business applicants.

The grant is in lieu of the aforementioned alternative energy incentives, meaning that a taxpayer can apply for the grant or claim one of the business tax credits, but not both.

The following persons are not eligible to receive payment:

• Federal, state or local governments,
• Non-profit organizations,
• Cooperative electric companies.

   

  Property eligible for this alternative energy incentive are:

• Solar property,
• Geothermal property,
• Qualified fuel cell property,
• Stationary micro turbine property,
• Combined heat and power system property,
• Qualified small wind energy property, and
• Geothermal heat pump property

   

The cost basis on which the payment is based upon is its original cost and, which includes all costs. These costs, such as installation and cost of freight, are part of property’s depreciable basis.

The investment tax credit, which is similar to the above alternative energy incentive, the cost basis of the energy property has to be reduced by fifty percent of the grant received. In addition, to the extent that specified energy property is disposed of within five years of being placed in service a percentage of the grant will need to be recaptured.

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