(47) An electrical clothes washer purchased before July 1,2003 or an electrical room air conditioner or electrical standard-size refrigerator purchased before July 1, 2004, which meets or exceeds the applicable Federal Energy Star efficiency requirements.

(48) Any of the following purchased before July 1, 2004:

(A) a fuel cell which generates electricity and heat using an electrochemical process, has an electricity-only generation efficiency greater than 35 percent, and has a generating capacity of at least two kilowatts;

(B) a natural gas heat pump which has a coefficient of performance of at least 1.25 for heating and at least 0.070 for cooling;

(C) an electric heat pump hot water heater which yields an energy factor of at least 1.7;

(D) an electric heat pump which has a heating system performance factor of at least 7.5 and a cooling seasonal energy efficiency ratio of at least 13.5;

(E) a central air conditioner which has a cooling seasonal energy efficiency ratio of at least 13.5;

(F) an advanced natural gas water heater which has an energy factor of at least 0.65.

(B) a home or business energy system not connected to the electric distribution system of a utility regulated under Title 30, and that otherwise meets the requirements of 30 V.S.A. § 219a(a)(3)(A), (C), (D) and (E); or

§ 5829. CREDIT FOR RENEWABLE-SOURCE ENERGY GENERATION

(a) "Renewable energy sources" in this section means farm systems as defined in subdivision 219a(4) of Title 30.

(b) Credit. A taxpayer of this state shall be eligible for a nonrefundable credit against the tax imposed under section 5822 of this title of $0.02 per kilowatt hour of energy generated in this state during the taxable year by the taxpayer from renewable energy sources. A credit available to a qualified person who is a partnership, limited liability company, Subchapter S corporation, or trust may not be claimed by the entity, but may be claimed by the entity’s partners, members, shareholders or beneficiaries, allocated among them in the same proportion as their allocable share of the partnership profits or distributable share of the income of the entity.

(c) Carryforward. If the amount of credit available under this section exceeds the taxpayer’s Vermont income tax liability for the taxable year, the excess may be carried forward as a credit against the taxpayer’s income tax liability in any of the next five years.

(d) Certification. A taxpayer claiming a credit under this section shall submit with the claim a certification by the commissioner of public service, indicating kilowatt hours generated from renewable energy sources during the taxable year.

Subchapter 11J. Farmers’ Tax Credit for Renewable Energy Sources

§ 5930v. DEFINITIONS

In this subchapter, the following definitions apply:

(1) "Farmer" means a person whose gross income in the taxable year was at least one-half from the business of farming, as that term is defined in U.S. Treas. Reg. 1.175-3.

(2) A "renewable energy system" is:

(A) A facility for generation of electricity which:

(i) operates in parallel with facilities of the electric distribution system;

(ii) is intended primarily to offset part or all of the customer’s own electricity requirements;

(iii) is located on the customer’s premises; and

(iv) employs a renewable energy source and utilizes a photovoltaic array or wind turbine electrical generating technology.

(B) A home or business energy system either connected or not connected to the electric distribution system of a utility regulated under Title 30, and that does not sell power back to the utility, but which:

(i) is intended primarily to offset part or all of the customer’s own electricity requirements;

(ii) is located on the customer’s premises; and

(iii) employs a renewable energy source and utilizes a photovoltaic array or wind turbine electrical generating technology.

(C) A hot water heating system that converts solar energy into thermal energy used to heat water, but limited to the property directly necessary for and used to capture, convert or store solar energy for this purpose.

(D) A biomass energy system of one of the following types:

(i) an automated biomass heating plant rated at less than five million BTU/hour peak output (including fuel storage bin and fuel handling system); or

(ii) a biomass-fired cogeneration plant using a steam turbine, with electrical output rating of no more than 100 kilowatts; or

(iii) a farm-based methane digester system using project gas as the energy source for supplying space heat, domestic hot water or process heat; or

(iv) a low-emissions, water storage boiler system, with peak output no greater than five million BTU/hour, consisting of one or more boilers and a minimum aggregate thermal water storage capacity of 400 gallons; or

(v) a low-emissions, biomass pellet-fired boiler system, with peak output no greater than five million BTU/hour consisting of one or more boilers.

(E) Geothermal energy heat pumps used for heating and cooling central equipment.

(F) Renewable energy resources measurement equipment, such as wind dataloggers, pyranometers and towers.

(3) "Total cost" is the purchase price of the components of a renewable energy system plus installation and construction directly related to the system, including permit costs, and reduced by any rebates, trade-in allowances or any other payment resulting from purchase or installation of the system.

§ 5930w. TAX CREDIT

(a) A taxpayer who qualifies as a farmer, and who completes installation during the taxable year of a renewable energy system supplying energy for the taxpayer’s dwelling or farm business located in Vermont, shall be entitled to claim as a credit against the income tax imposed under this chapter 50 percent of the total cost of that system. If more than one person owns the dwelling or business, the credit shall be divided among the owners in the same proportion as their ownership interests.

(b) If the amount of credit available under this section exceeds the taxpayer’s Vermont income tax liability for the taxable year, the excess may be carried forward as a credit against the taxpayer’s income tax liability in any of the next five years.

(c) A taxpayer claiming a credit under this section shall submit with the claim:

(1) A certified accounting of the total cost of the system, itemizing costs attributable to acquisition, construction and installation and any cost reductions received.

(2) Certification that all products for which a credit is claimed are certified or listed by agencies or associations as described in this subdivision; or where no agency or association is described, that the equipment meets construction industry standards:

(A) Wind turbines shall be rated in accordance with the latest performance rating standards published by the American wind energy association (AWEA), and the manufacturer must be a member in good standing with AWEA.

(B) Solar thermal collectors shall be tested and rated in accordance with the solar rating and certification corporation (SRCC) test methodologies and standards. Collectors shall be listed in the SRCC rating guide.

(C) Solar photovoltaic modules and inverters shall be UL listed to appropriate standards for electrical and fire safety for the environment in which they are applied.

(D) Geothermal heat pump heating and cooling systems shall be listed by ARI to ARI standard 870-99 for direct geoexchange heat pumps. Heating COP shall be a minimum of 3.7, and cooling EER shall be a minimum of 16.6 at standard test conditions.

(E) All electrical installations shall meet the National Electric Code, using components that are either UL listed, or tested to a UL standard where available.

(3) Certification that the system components carry at least a one-year limited warranty covering defects in design, manufacture and installation, or a longer warranty for the following components:

(A) Photovoltaic panels, 20 years.

(B) Wind turbines and towers, five years.

(C) Solar thermal collectors, two years.

(D) Inverters, two years.

(E) Geothermal heat pump heating and cooling central equipment, two years.

(F) Biomass boilers and furnaces, two years.

(G) Steam turbines, two years.

(4) Certification, for any system described in subdivision 5921(1)(D)(i) or (1)(E) of this title, that the system will be used as the primary heating or cooling appliance, or both, for the structure in which it is installed.

§ 5930x. RECAPTURE OF CREDIT

(a) Notwithstanding the provisions of section 3102 of this title, the commissioner shall disclose to the commissioner of public service the name of each taxpayer claiming a credit under this section, the location of the structure and a description of the renewable energy system for which the credit is claimed.

(b) The commissioner of public service is authorized to adopt rules governing reporting by persons claiming credits or owning structures for which a credit was granted.

(c) If, within ten years after the year in which installation was completed, the commissioner of public service determines that the renewable energy system for which a credit was granted under this subchapter ceases to meet the requirements of this subchapter, or that it ceases to be used as the primary source of energy or heat or ceases to be used as a significant source of energy or heat for the dwelling or business structure, then the owner of that dwelling or business structure shall be assessed a penalty in the amount of ten percent of the total credit for each year less than ten for which the system was so used. The penalty shall be assessed in the same manner, and subject to the same notice, interest, penalty and appeal provisions, as an income tax deficiency under this chapter.

(12) "Alternative fuel vehicle" means a motor vehicle which meets emission standards established for the California Super Ultra Low Emissions Vehicle (SULEV), and which is:

(A) propelled only by one or more of the following fuels: liquefied petroleum gas, natural gas, hydrogen, electricity or solar energy; or

(B) a hybrid electric vehicle, combining two or more energy conversion technologies with one or more energy storage technologies, using at least one of the fuels listed in subdivision (A) of this section, and which has regenerative braking capability.

Sec. 3 of this act (tax credit per kilowatt hour of energy generated) shall apply to taxable years beginning on and after January 1, 2002. Sec. 4. of this act (farmers’ renewable energy tax credit) shall apply to taxable years beginning on or after January 1, 2001.