Oregon’s energy tax credits
Published 4:00 am Monday, February 7, 2011
With the Oregon Legislature set to consider whether to renew about 20 tax credits that offer companies and individuals a break on everything from making movies in the state to producing biomass, some in Central Oregon are expressing their support for programs that focus on energy efficiency and alternative energy.
The Business Energy Tax Credit program, or BETC, is designed to help people invest in renewable energy, energy efficiency and recycling. In the next budget cycle, the cost of the credits is estimated to be $38 million. By the 2015 session, the credits are estimated to increase to $250 million. And the program has drawn criticism in the media and from lawmakers because of large subsidies to wind farms and other businesses.
But the program has been key in helping some smaller builders across the state, including Central Oregon, adopt new energy-efficiency technologies, said Bruce Sullivan, a green building consultant with Earth Advantage in Bend.
Renewable energy projects like installing solar hot water heaters can be economical over the life of the device, he said, when people compare the cost with what they save on energy bills over time. But often, that upfront cost is just too much of a barrier, Sullivan said.
“The tax credits make it possible for people to overcome that first cost obstacle,” he said.
It helps builders he works with go beyond basic energy-efficiency standards, he said, and build highly energy-efficient homes. Builders are able to get up to $12,000 in tax credits for adding things like a renewable energy system and high insulation levels.
“One of the key recipients of the BETC has been Bend Habitat for Humanity, who (is) using those credits to put solar systems on their Habitat homes,” Sullivan said. He noted that the homeowners are seeing $5 energy bills with the improvements.
The purpose of the tax credits isn’t to pay for all of the energy-efficiency features of a home, he said, but to pay for enough to get people’s attention and provide an in- centive for them to move forward.
“The whole purpose of this is to get a few builders to adopt these things so all the builders will see what a great thing it is,” Sullivan said, “and it pulls them gently into the future.”
While some critics might object to the cost of the tax credits, he said, in the long run conserving energy means that fewer power plants need to be built to keep up with demand.
Whether the programs and projects supported by the BETC are worth the tax dollars is something for the Legislature to wrestle with, said Mike Riley, executive director of the Environmental Center in Bend.
Part of Bend 2030
But energy efficiency and renewable energy are important issues to Central Oregon residents, he said, noting that those issues came up multiple times in the Bend 2030 planning process.
“There’s clearly been problems with the program, but I don’t think you throw the baby out with the bath water,” he said. “We learn from that and go forward.”
Michael Scannell, with Woodcraft Building in Bend, is applying for the High Performance Home program that is a part of the BETC. With the tax credits and other incentives, he would probably save around $10,000, he said, because he will include things like a double wall and dense insulation as well as a solar hot water heater.
It’s a spec home, he said, so he’s hoping people will be willing to pay a little bit more for an energy-efficient home. And the BETC helps pay for the energy upgrades, he said — he couldn’t afford to do them without the credits.
“I think that’s the future, and if you’re not building that way, eventually I think you’re going to be falling behind,” Scannell said.
At SolAire Homebuilders in Bend, the company was able to install a solar hot water heater and photovoltaic panels on its Bend headquarters, said Cindi O’Neil, vice president of sales and marketing. And because the major renewable energy additions were not part of the appraisal, the company could not get a loan for them, she said.
“The incentives that we received from the Business Energy Tax Credit were very helpful in defraying the cost,” she said.
Keeping the BETC would also help create green jobs, she said, for people who sell and install solar panels, wind turbines, high- efficiency heating and cooling systems, and more.
“These are great jobs, and they’re green jobs,” O’Neil said.