REC Payment/Tax Incentives

Renewable Energy Credit (REC) payment and tax credits are available for producers of renewable energy.

For residential and small commercial members installing solar, wind or hydroelectric technology, LPEA offers a Renewable Generation REC payment per policy 359. A REC contract must be completed in order to receive these funds. The IRS requires that a W-9 form be completed and returned to LPEA.

Forms PDF

The Energy Policy Act allows tax credits for solar water heating and photovoltaic systems. For more information go to www.energystar.gov.

 

FAQs - Net Metered Solar Generators and Taxes

Q: Are REC payments that I receive for my renewable generation system from LPEA taxable and considered income?

A: We believe so.

As always, please consult a tax expert for your specific tax questions.

LPEA is purchasing the Renewable Energy Credits (REC) or Environmental Attributes when an Optional REC Contract is signed by the solar PV system owner. For this reason, the IRS requires that a Form W-9 be provided to LPEA for the purpose of issuing a REC Payment to the system owner. At the end of the year, LPEA will issue an IRS 1099-MISC to the system owner for the amount of the REC Payment, as long as the payment exceeds the IRS reporting threshold for the current tax year.

Q: If my system produces excess generation and a payment is made to me by LPEA (credit on my electric account or a check sent in the mail) for the wholesale value of the excess generation, is that taxable and considered income?

A: We believe so.

As always, please consult a tax expert for your specific tax questions.

LPEA is purchasing the excess generation from you.  For this reason, we believe that this may be considered income.

 

Other resources:

Database of State Incentives for Renewables & Efficiency (DSIRESOLAR)

Federal Tax Credit for Solar Energy