Renewable Alternative Energy Explained

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 Channel

Alternative energy development integrates renewable generation, photovoltaics, wind turbines, battery storage, power electronics, and HVDC to optimize grid integration, smart inverters, and microgrids for resilient, efficient electrical systems and decarbonized power networks.

What Is Alternative Energy Development?

It is the engineering of renewable power systems—generation, storage, and grid integration—to decarbonize electricity.

✅ Design of PV/wind converters, MPPT, and grid-following/g-forming inverters.

✅ Energy storage sizing, BMS control, and dispatch for frequency regulation.

✅ HVDC, microgrids, protection coordination, and grid integration studies.

Alternative energy developments represent a transformational opportunity to not only attract new global investment and create new jobs, but to reduce the world's reliance on fossil fuels. And, the future looks bright because experts predict that completed alternative energy developments will add 4.5 trillion dollars in value to the economy by 2030. For readers new to the field, the fundamentals of alternative energy help clarify key terms and drivers shaping this transition.

Alternative Energy Development - Wind Energy
Wind energy, as an alternative energy development, is the world’s fastest-growing energy source. In fact, 42 per cent of all new power plants installed in 2008 are powered by the wind. In January 2002, installed world capacity exceeded 24,000 megawatts, of which 205 megawatts (or 0.85 per cent of world capacity) was located in Canada. Over the past decade the cost of wind energy has fallen from 30 cents per-kilowatt-hour to around eight cents per-kilowatt-hour. In major policy reviews, the U.S. Department of Energy and the British government have predicted future wind energy costs of between 3.4 to 5.5 cents per-kilowatt-hour by 2020. A recent assessment of wind’s prospects and impacts released by the U.S. Department of Energy concluded that the United States could supply 20 per cent of the nation’s electricity needs through wind by 2030. This assessment and related analyses found achieving this goal would:

• Reduce electric-sector greenhouse gas emissions by about 25 per cent, relative to a scenario with no new wind additions;
• Reduce electric sector natural gas and coal consumption by 50 per cent and 18 per cent, respectively; and avoid construction of 80,000 megawatts of new coal plants;
• Reduce electric-sector water consumption over 15 per cent by 2030, with nearly one third of the reduction in the arid western states; and
• Increase annual property tax revenues and rural landowner payments to more than 1.5 billion dollars and 600 million dollars, respectively, by 2030.

Positioning wind alongside other resources in renewable power generation portfolios can further enhance grid reliability and reduce overall system costs.

Alternative Energy Development - Solar Energy
Photovoltaic (PV) technology has become a focal point in solar alternative energy development due to a number of social and economic factors, including the need to reduce greenhouse gas (GHG) emissions, deregulation, and the restructuring of electric power generating companies. PV cells convert sunlight directly into electricity via the photovoltaic effect using specially treated semiconductor materials. Over the past 30 years crystalline silicon has been the material of choice in PV panels Solar PV systems represent a 42-million-dollar industry in Canada, with sales increasing, on average, more than 20 per cent annually over the past decade. In 2000, 1.5 megawatts of modules were sold in Canada, with 98 per cent of this total being used in off-grid or remote applications, and two per cent grid-tied. Based on annual 20 per cent growth rates, the production price of electricity from photovoltaics in Canada can be expected to drop below that of conventional thermal sources by 2020. Each installed kilowatt of PV power has the potential to offset 1.6 tonnes of CO2 per year when replacing coal-generated electricity, 1.3 tonnes per year when replacing oil and 0.7 tonnes per year when replacing natural gas. When integrated into broader alternative energy systems across homes and businesses, PV can provide resilient, distributed capacity for communities and industry.

Alternative Energy Development - Biomass Energy
Biomass, as an alternative energy development, is increasingly seen as a competitive and sustainable energy source. Almost six per cent of primary energy demand is currently supplied by biomass energy (mostly used by the pulp and paper industries, who burn their own residues to turn steam into electricity). The remainder is mostly cordwood, used for residential heating. At the moment, most biomass combustion alternative energy development is concentrated on small-scale cogeneration systems to utilize industrial waste, of around one-megawatt output. Various recent studies have confirmed that extensive biomass resources remain under-utilized across Canada. This includes over five million bone-dry tonnes of lumber and sawmill plant residues, which are being incinerated or landfilled without heat recovery. Successful deployment often depends on well-structured alternative energy projects that align feedstock logistics with local heat and power needs.

Alternative Energy Development - Geothermal Energy
Approximately 35,000 Canadian homes and buildings currently receive heating and cooling through geo-exchange installations. However, policy obstacles still exist which prevent extensive alternative energy development of Western Canada’s high-temperature geothermal resources for electrical generation. The cumulative geothermal resource remains poorly quantified due to a 25 year hiatus in government funding of geothermal science. Through commercial avenues, approximately 100 megawatts of geothermal power potential has been identified as of 2009, although there is still no geothermal power in Canada’s electrical grid. As an under-explored geothermal resource, geothermal projects will represent a pertinent frontier for commercial development in the near future. The corporate and public awareness of geothermal technologies has grown in the recent past through an increased media focus, and a strengthening support for carbon-friendly lifestyle choices. Currently, the Canadian Geothermal Energy Association is leading 33 government policy projects to establish a foundation for the imminent development of geothermal electrical projects. As the effect of recent carbon taxes continues to saturate electricity markets, new geothermal opportunities will be available to fill the void with reliable and clean alternative energy. As part of integrated alternative energy solutions across provinces and territories, geothermal can deliver firm, low-emission baseload to complement variable renewables.

Alternative Energy Development - Tidal Energy
Tidal energy is an alternative energy development that is extracted directly as kinetic energy from a moving stream, whereby seawater is ‘partially impounded’ in its flow through a channel. Local effects on the tidal regime are considered low or negligible, depending on the technology used to extract energy. Tidal current energy is predictable and regular, and will be unaffected by global climate change. Nevertheless the technology for exploiting this resource is still in its infancy, and there are, as yet, no commercial installations anywhere in the world. Tidal current power development is estimated to be one to three years behind ocean wave energy and five to eight years behind wind energy. A clear overview of technologies and site considerations is provided in this guide to what is tidal energy for those evaluating pilot deployments.

Alternative Energy Development - Wave Energy
Ocean wave technology, as an alternative energy development, extracts kinetic energy from the up-and-down motion of waves, using it to generate electricity. Inventors have taken out hundreds of patents for wave energy devices over the years, but concentrated effort in this direction dates from the 1970s oil crisis. The first wave power plants were built near Bergen, in Norway, in the mid-80s. Together, both plants had a combined capacity of 850 kilowatts. The first wave energy plant that was used for commercial purposes was brought online in Islay, Scotland, in November 2000. Today, India, Japan, Australia, Indonesia, Australia, and countries of the European Union have undertaken numerous government-supported projects. BC Hydro, an electrical utility in the Canadian province of British Columbia, has committed to implementing three to four megawatts of ocean wave generating capacity as part of the Vancouver Island Green Energy Demonstration project. In order to develop wave power towards its potential, extensive data collection is needed to pinpoint prime sites. Further research is also needed to assess the impact of heavy storms on installed equipment. These demonstrations illustrate how emerging ocean resources can contribute to diversified alternative energy power mixes when supported by robust data and engineering standards.

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Alternative energy systems integrate solar PV, wind turbines, battery storage, and smart grids using power electronics, inverters, and microgrids to optimize reliability, grid integration, load management, and decarbonization in modern electrical engineering.

What Are Alternative Energy Systems?

Renewable power architectures using solar, wind, storage and power electronics for reliable grid-integrated electricity.

✅ Design with MPPT inverters, DC/DC converters, and protection relays

✅ Grid integration via PCC, power quality control, and harmonic mitigation

✅ Energy management: SCADA, EMS, forecasting, and battery SOC control

Alternative energy systems - What are solar power systems?

Solar electric technology, an adequate alternative energy system, takes sunlight and coverts it into electricity directly. The technology works best when the sun is at its peak, at which time it strikes the solar electric modules directly. Solar electric technology does not use the sun's heat to make electricity, but there are certain solar alternative energy systems that are used to heat water. Instead, this alternative energy system produces the electricity directly from the electrons that are freed from sunlight's interaction with semiconductor materials that are found in the solar electric cells. For a deeper overview of photovoltaic system types and performance, see this guide to solar power systems for additional context.

The basic building block of solar electric technology is the solar cell, which are then are wired together with other solar electric cells to produce a solar electric module. The power output on these modules ranges from about 10 watts to 300 watts. One or more solar electric modules connected to an inverter means that the solar electric alternative energy system is tied to the utility grid. The inverter switches the system's direct-current (DC) power to alternating current (AC). This current is what is compatible with the utility grid and it powers devices such as appliances, lights, televisions, and computers. This AC output integrates with household circuits as a reliable source of alternative energy power used by everyday devices.

Alternative energy systems - What are wind power systems?

Wind is air in motion, which comes from the sun. It's an overly abundant fuel source that doesn't harm the environment. The alternative energy systems for this renewable fuel source deflects or stops the wind, converting the wind’s kinetic energy into potential energy of pressure, thus create wind loads. These wind loads are harnessed by wind electric alternative energy systems such as wind turbines to create electricity. Because wind replenishes naturally, it is a prime example of renewable alternative energy that supports long-term decarbonization.

Here are some of the components that make up a wind turbine:

Ongoing advances in materials, controls, and siting practices are central to alternative energy development that improves turbine efficiency and reliability.

• Blades: Most of the wind turbines of this alternative energy sytems have three blades, though there are some with two blades. Blades range from 30 to 50 meters (100 to 165 feet) in length, with the most commonly-used sizes at around 40 meters (130 feet). A 40 meter LM glass-fiber blade for a 1.5 MW turbine weighs 5,780 kg (6.4 tons) and one for a 2.0 MW turbine weighs 6,290 kg (6.9 tons).

• Controller: There is a controller in the nacelle and one at the base of the turbine. The controller monitors the condition of the turbine and controls the turbine movement.

• Generators: Most wind turbines convert the mechanical energy generated from the wind turbine’s rotation into electrical energy using a single AC generator.

• Nacelles: The nacelle houses the main components of the wind turbine, such as the controller and the generator.

   

   

• Rotor: The rotor includes both the blades and the hub (the component to which the blades are attached).

   

   

• Towers: The towers are usually tubular steel at varying heights starting at about 60 to 80 meters (about 195 to 260 feet). There are some towers with heights around 100 meters (330 feet).

Alternative energy Systems - What are geothermal power systems?

Geothermal technology, an alternative energy system that doesn't hurt the environment, produces electricity from hydrothermal (hot water/steam) resources. Hydrothermal resources at high temperatures (between 300 and 700 degrees Fahrenheit) can be used to make electricity. These high-temperature resources may originate from either hot water wells or dry steam wells. These resources can be used by drilling wells into the earth and, at that point, piping the steam or hot water to the surface. Geothermal wells are one to two miles deep. Geothermal stands alongside solar, wind, and other forms of alternative energy that leverage naturally replenished resources.

In a dry steam power plant, the steam from the geothermal reservoir is connected from a well to a turbine generator to make electricity. In a hot water plant, some of the hot water is turned into steam. The steam powers a turbine generator just like a dry steam plant. Then, when the steam cools, it turns into water and goes back into the ground to be used over again. These closed-loop practices exemplify the principles behind what is alternative energy in practical power generation.

Alternative energy systems - What are wave power systems?

Wave power plants are rare because waves aren't produced on a consistentent basis. However, if harnessed, wave production can supply an adequate amount electricity. This electricity production starts with wave energy converters (WEC), which converts wave energy into mechanical energy, and then uses a power take-off system to generate electricity. The power is generally taken using a turbine driven by pressurized air, pressurized oil, or pressurized water. Many coastal pilot sites evaluate device survivability and grid integration through targeted alternative energy projects across diverse sea states.

There are three categories of wave energy converters, an environmently-friendly alternative energy system, based on how they capture the mechanical energy:

• Point absorbers are devices whose surface area is very small in comparison to the wave length of ocean waves.

   

• Attenuators are relatively long devices that are placed parallel to the general direction of wave travel.

   

• Terminators are placed a certain way, so that they can absorb energy from the wave.

   

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Alternative energy cost analyzes LCOE, CAPEX, OPEX, and grid parity across solar PV, wind turbines, and battery storage, considering efficiency, load factors, and grid integration to optimize system design and lifecycle economics.

What Is Alternative Energy Cost?

Alternative energy cost is LCOE-based pricing for solar, wind, and storage, reflecting CAPEX, OPEX, and grid impacts.

✅ Uses LCOE comparing PV, wind, and storage across duty cycles.

✅ Includes CAPEX, OPEX, maintenance, and financing assumptions.

✅ Evaluates grid integration, curtailment, and reliability metrics.

Alternative energy cost is determined by how utilities typically set their rates and account for the cost differential between alternative energy and conventional energy sources. Basically, cost recovery of a utility’s investments and operating expenses determine electricity rates. For background on definitions and resource types, see this overview of what is renewable energy to align terminology across programs.

These alternative energy costs include:

Understanding the breadth of technologies captured under renewable alternative energy helps clarify why cost components vary by resource.

• owning generation
• owning transmission and distribution assets
• a return on owned assets
• purchased power contracts
• recovery of various operating expenses, including fuel costs, maintenance, and administration.

  Costs for generating, transmitting, and distributing electricity are in a utility’s rate. Because utility costs are bundled together, all generation resources are combined to create a utility “system mix” of generation. In other words, utilities do not normally distinguish between individual generation sources for their customers. Therefore, an equivalent mix of the utility’s generation resources and purchased power is provided to each customer. In practice, product structures for alternative energy power are designed to work within this system mix paradigm.

  For alternative energy cost determination, utilities and regulators are interested in separating the specific alternative energy costs related to securing green power. In this way, green power products are unique, differentiated electricity products. Since customer participation is voluntary, only those customers that choose to sign up for these programs pay the incremental costs. Alternative energy power program participants typically pay the higher alternative energy cost in the form of a premium on their monthly bill. In some jurisdictions, available alternative energy incentives help offset premiums for early adopters.

  Four Main Components In Determinating Alternative Energy Cost

• 1. The cost of the alternative energy source. This includes the total cost of electricity and/or environmental attributes from all alternative energy resources used in the product, whether from wind, solar, geothermal, biomass, or another source, and whether owned by the utility or acquired through a power purchase contract. For example, cost trajectories for alternative energy solar power have declined sharply in recent years due to technology improvements.
• 2. Program implementation costs. Any additional alternative energy costs attributed to implementing the alternative energy program, including administration and marketing. Utilities sometimes leverage alternative energy grants to defray outreach and administration expenses.
• 3. Ancillary services costs. The additional costs incurred to integrate variable output resources, particularly wind, into a utility’s system.
• 4. Displaced utility generation (and capacity) resource costs. The renewable resource displaces electricity that the utility would otherwise have generated or purchased.

   

  In conclusion, alternative energy costs can be represented as: Alternative energy premium = (1) + (2) + (3) – (4)

  Alternative Energy Cost Determination

  Alternative energy costs are captured through the specific power purchase agreements for alternative energy (in this case, the term alternative energy is interchanged with renewable energy) or RECs (renewable energy contracts), or through the regulatory approval process for utility-owned renewable projects. As long as these are tracked separately from the rest of the generation mix, the appropriate alternative generation costs can be determined. However, generation costs are hard to determine because it's uncertain how many customers plan to enroll in the program and how long they plan to participate. In electric markets that have not gone through restructuring from the electric industry, contracts for generation are typically long-term (10 years or more), and investment in owned facilities is generally considered to be for the life of the facility (20 years or more). For readers new to key terms and market structures, this primer on renewable energy facts provides helpful context for interpreting contract and REC pricing.

  The long-term nature of the resource commitment severely contrasts with the program subscription commitment required of most customers. Most alternative energy programs do not require that customers enroll for a specific term, much less sign up for 10 or 20 years to match the facility or contract life of the renewable power supply source. Therefore, while the annual cost of renewable energy is straightforward to determine, the utility faces some level of risk that will likely be reflected in the product pricing.

  However, if the utility is also subject to a renewable portfolio standard and is therefore required to procure a certain fraction of renewable energy for its overall load, there may be less risk, because the utility has greater flexibility in managing its overall renewable portfolio between its compliance and voluntary program obligations.

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• Alternative Energy Channel

Forms of alternative energy span solar, wind, hydro, geothermal, and biomass, engineered with power electronics, inverters, and grid-tied systems for efficient generation, storage, and distribution across smart grids and microgrids.

What Are Forms of Alternative Energy?

They include solar PV, wind, hydro, geothermal, and biomass, converted via generators, inverters, and grid storage.

✅ Solar PV: MPPT inverters convert DC modules to AC for the grid.

✅ Wind: variable-speed turbines use converters to regulate frequency and voltage.

✅ Hydro, geothermal, biomass: dispatchable sources aid grid stability and storage.

Forms of Alternative Energy - Solar Energy

The sun is one gigantic star that constantly radiates an enormous amount of energy (solar energy). How much is "enormous?" Well, let's just say that the sun sends out more energy in one second than Earth has used since the beginning of time. Like most stars, the sun is a huge ball of gas made up mostly of helium gas and hydrogen. As a primer on solar technologies, the resource at solar power fundamentals offers context for how these systems scale.

The Earth, being the third planet from the sun, only receives a small portion of the sun's solar energy, however, that amount is more than enough to supply all our electric power needs. For comparisons across resources, see renewable energy sources to understand how solar's potential relates to wind, hydro, and more.

Two ways to make electricity from solar power are photovoltaic and solar thermal systems. Photovoltaic electric generation is produced using photovoltaic (PV) cells: the sunlight hits the solar cell and converts sunlight into electricity instantly and silently--without the hassle of wearing out any mechanical parts. These solar systems are mainly used to generate power in areas that are a long distance from electric power lines. For configurations and component choices, alternative energy systems guidance explains typical PV setups used off-grid and in hybrid applications.

Solar thermal systems (or concentrated solar power) use a solar collector with a mirrored surface to focus sunlight onto a receiver that heats a liquid into steam and then turned into electric power. The process is in the same vain as coal plants: coal is burned into steam, which is then turned into electricity. Deployment considerations are explored in alternative energy solutions that compare CSP with other utility-scale options.

Solar power is expected to be a global supplier of electricity between 2015 and 2020. Solar power's benefits are phenomenal: it's free, its supply can never deplete, it doesn't pollute, and it doesn't damage the environment. These benefits underpin broader renewable alternative energy strategies that accelerate decarbonization across sectors.

Forms Of Alternative Energy - Wind Energy

The sun’s heat reaching the planet earth creates winds, which makes wind a form of solar energy. How does it work? Well, as the sun's rays heat the Earth’s air is heated by the sun, it expands and regions of high and low pressure are formed, these high and low movements create wind energy. For context on definitions and categories, what is alternative energy clarifies how wind fits within the broader mix.

Harnessing wind energy is done using contraptions such as wind turbines. Large wind turbines are built close together to operate on wind farms to produce large amounts of power for electrical utilities. Smaller small wind turbines can be used by homeowners and remote villages who want to generate their own electricity.

Generated Wind power, like other forms of alternative energy, can also be used for charging batteries, pumping water, or grinding grain. All of this can be done without causing greenhouse gas emissions which damage the environment. This form of alternative energy also uses minimal land area, but intermittent wind patterns make it difficult for this form of alternative energy to be a constant and reliable energy source.

Forms of Alternative Energy - Biomass Energy

Biomass energy is a way to turn your food waste into electricity. Biomass is any kind of organic matter (anything that was once alive) that can be used as an energy source. Besides food waste, crops, wood, animal and yard waste are examples of biomass. People have used this form of alternative energy for thousands of years - longer than any other energy source.

Biomass feedstock (farm animal wastes, crops and residues, etc.) is the main ingredient of biomass energy. The heat in this form of alternative energy is used to generate power, fuels and other energy options. The biomass fuels (or biofuels), which comes from biomass feedstock, can be used in a solid, liquid, or gas state. Disposed food, paper, sewage, lawn clippings and sawdust, are some available biomass energy resources used for power production.

Forms of Alternative Energy - Geothermal Energy

Geothermal is a Greek word: geo (earth) and therme (heat). This form of alternative energy comes from the heat, which is from the earth's core (almost 4,000 miles beneath the earth’s surface). Earth's double-layered core is made from melted rock (hot magma), which surrounds a solid iron center. The heat comes from the slow decay of radioactive particles produce high temperatures that constantly rise to the earth's surface. Geothermal electricity is created by pumping a fluid (oil or water) into the Earth, allowing it to evaporate and using the hot gases vented from the earth's crust to run turbines linked to electrical generators. Further technical detail is summarized in geothermal energy basics for readers interested in plant designs and resource types.

In some areas on the planet (such as Iceland), there is very hot water or steam that is close enough to the surface where this alternative energy resource can be reached economically with a drill. When obtained, the steam, or hot water flashed to steam, turns a turbine, which then, turns a generator that produces electricity. Many experts believe that geothermal energy only be a minor contributor to the global energy supply because of the scarcity of geothermal sites in the world.

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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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