Browsing Tag Energy Forms

In many countries today, a lot is being said about harnessing renewable energy technologies – particularly in light of the rising oil prices.

Renewable energy is power which has been generated from renewable resources – in other words, it does not “run out” or eventually become depleted. It can be continuously re-created.

It’s not just the prices of oil that has people searching for clean and renewable energy sources. Global warming concerns, and problems created by international pollution, have triggered this concern as well. Governments around the world have begun to support research on improving the renewable energy technologies.

Currently, the five common renewable energy sources are biomass, hydropower, geothermal heat, wind, and solar power.

Biomass

Biomass consists of organic material which has been produced by animals and plants. Biomass energy uses stored energy from the sun. This is a result of the natural process which any plant uses to survive – photosynthesis.

Because we can always grow new crops and trees, biomass is considered a form of renewable energy. Furthermore, organic waste can be used to create biomass as well.

Some examples of commonly used biomass fuels are crops, wood, garbage, and manure. When these materials are burned, they emit heat which produces steam, that can in turn be used to create electricity. Some biomasses are converted into other usable energy forms, such as methane gas or biodiesel.

Hydropower

Hydropower is one of the oldest forms of renewable energy. It was used in ancient times to grind grain. Coal was once the only source of power in the United States. But in 1880, the first Hydropower plant was built, and since then, more of these have been erected in order to provide the people with electricity.

Geothermal Energy

Geothermal Energy comes from within the Earth itself. The steam or heat which stems from the center of the earth can be used to regulate the temperatures of buildings, and can be used to generate electricity as well.
Because water can always be replenished by rain, and because the earth’s core maintains its temperature, this is considered one form of renewable energy.

Wind Power

Even the ever-present wind can provide a renewable energy source. Wind is created as a result of the uneven heating on the earth’s surface, which causes air to move. Thus, wind power is essentially a bi-product of solar power. Wind propellers are used to collect the wind’s kinetic energy, which turns turbines that are in turn used to create electricity.

Solar Power

This form of renewable energy will be available as long as the sun shines. Solar energy can either be used as thermal energy, or it can be converted into electricity.

As a thermal energy, it can be used to heat water or spaces. Through the use of solar cells or similar photovoltaic devices, it can be used to create electricity. The heat of the sun can also be used to create steam, which turns turbines and thus produces electricity.

Renewable energy tax credits are financial benefits that are available to people who make use of such energy forms. The different forms of tax credits and the benefits that can be derived from them are considered here.

Renewable energy production facilities can cost a lot to install and operate. Though certain companies have made substantial steps in reducing the costs of installation and operation, tax credits are essential on order to place them on a level playing field with fossil fuels.

Rising prices in terms of the costs of oil and gas prices as well as the war in Iraq and other environmental problems have led to different problems. The United States is also concerned about the energy security of all our power sources. The United States recognizes the need and power of renewable energy as an alternative fuel solution and has consistently supported its development through the use of federal income tax credits as well as incentives.

In the year 2005 President George Bush signed the Energy Policy Act of 2005 into law. The Congress took about four years to pass after reviewing several versions of the policy. It extended tax credits for winds and biomass energies for an additional period of two more years. It also included additional tax credits for solar, geothermal and ocean energy as well.

Solar tax credits apply to both residential and business users. However, these tax credits only apply to equipment installed between 1/1/06 and 12/31/08. Equipment that is installed includes solar systems which generate electricity and heat, cool and provide hot water to structures. This equipment should also be operational in the first year that credit is taken and the taxpayer should be the original user. The credit is about 30% with a $2,000 cap for each particular unit used by a residential user. The credit is 30% with no business cap specified for corporate users. At the end of the grace period the corporate tax credit will return to its previous level of 10%.

Geothermal corporate credit remains an 10% and has no stated maximum. This credit doesn’t apply to geothermal heat pumps and it is only limited to geothermal energy equipment which produces, uses and distributes energy that comes from geothermal deposits. A personal tax credit of 10% with a $300 maximum can also be taken for geothermal heat pumps.
The federal government also includes production tax credits for renewable energies. These renewable energies tend to have credits that permit companies to write off the investment against other investments. This was due to a major push of support for certain renewable energy technologies. The credit available was then extended up till December 31 2008. Credits available are 1.9 cents per kwH of geothermal, wind, closed looped biomass and 1 cent per Kwh for hydroelectric power, landfill gas, municipal soled waste and open loop biomass for the first ten years of operation.

Somewhat similar to the production tax credits were the provisions for renewable energy production incentives known as REPI for state as well as local governments along with nonprofit electrical cooperatives. The subsequently enacted law also include