On January 12, 2009, Virginia Governor Timothy M. Kaine announced his proposal to bring green jobs to Virginia, including a package of tax credits and incentives for businesses offering energy efficient goods and services. This proposal is part of Kaine’s newly launched energy initiative “Renew Virginia” that is designed to promote renewable energy projects and conservation in the Commonwealth of Virginia. The initiative is also designed to make Virginia an attractive place for existing renewable energy companies to relocate.
Gov. Kaine’s proposal includes the following:
- Clean Energy Manufacturing Incentive. Expand existing incentive grants for companies that manufacture renewable energy equipment. The grants would be available to new and expanding businesses producing goods and equipment for energy efficiency, solar, biomass, wind, nuclear and other clean energy sources. The size of the grants would depend on the company’s economic return to Virginia. Kaine intends to include $2 million in his proposed budget to start the program.
- Biofuels Incentive Grant. Increase existing financial support for biofuel producers that use fuel sources that are not also used for food. The proposal would provide a 10-cents-per-gallon incentive for biofuels produced from these sources and a 7.5-cents-per-gallon incentive for biofuels produced from food crops.
- Renewable Energy System Income Tax Credits. Establish an incentive that would provide an income tax credit for individuals and companies who install renewable energy systems. Corporations would receive up to $20,000 for solar photovoltaic, $10,000 for solar thermal and $15,000 for wind-powered electric generators. The total tax credits available for all individuals and corporate tax payers would be capped at $1 million.
- Renewable Energy Equipment Sales Tax Exemption. Exempt, year-round, solar photovoltaic systems, solar thermal systems and wind systems from payment of sales tax. This initiative would provide savings to companies and consumers by lowering their costs to install such systems.
These initiatives were among a number of other efficiency and renewable proposals offered before the Virginia General Assembly as it convened the 2009 legislative session on January 14. They will be the topic of intense debate as Virginia seeks to deepen its participation in the “new energy” market — a move seen particularly important as experts anticipate broad national renewable and efficiency initiatives to come from the incoming Obama Administration and Democratic-controlled 111th Congress. McGuireWoods will continue to monitor both the Virginia and national proposals as they move through their respective legislative processes.
McGuireWoods LLP regularly assists clients with all aspects of renewable energy projects, including project finance, corporate formation and structuring, energy asset purchases and sales, negotiation of power marketing agreements, energy regulation before the FERC and state regulators, transmission projects and licensing and permitting matters. For further information on related renewable energy matters, please contact one of the following McGuireWoods attorneys: