Consumer Tax Incentives

Fuel Cells

What are the tax incentives for fuel cells?

These incentives are tax credits for two advanced distributed generation technologies: qualifying fuel cell and microturbine systems. Fuel cells generate electricity through a chemical process. They are somewhat similar to batteries, except fuel must be fed continuously to them. Microturbines are small power generation systems using a gas turbine engine, based on related turbines used in transportation. The credits are available for systems "placed in service"prior to December 31, 2016.

Who is eligible for the tax incentives?

Individuals are only eligible for the fuel cell tax incentive, while businesses can also apply for an incentive for microturbines.

What are the incentives and how do they work?

For fuel cells:
- Credits are for 30% of the cost, up to $1000 per kW of power that can be produced.
- To qualify systems must have an efficiency of at least 30% and must have a capacity of at least 0.5 kW.
This incentive is permissible against the Alternative Minimum Tax (AMT).

What do I have to do to qualify for these incentives?

To qualify, taxpayers will probably need to have evidence regarding:

The cost of the system (this includes the power generation system itself and "associated balance of plant components, including, in the case of microturbines, "secondary components located between the existing infrastructure for fuel delivery and the existing infrastructure for power distribution"),*
The capacity of the system,
The efficiency of the system, and
When it was placed in service.

Where can I learn more about qualifying products?