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Energy Efficiency Tax Incentives

Federal Tax Incentives
The American Recovery and Reinvestment Act of 2009 (ARRA) established energy efficiency tax credits for consumers purchasing and installing certain energy efficient products. Not all appliances and homes apply for Federal Tax Credits.

Qualifying geothermal heat pumps, small wind turbines, and solar energy systems are eligible for a tax credit of 30 percent of product cost with no upper limit. This tax credit expires on Dec. 31, 2016.

Qualifying fuel cells are eligible for a tax credit of 30 percent of the product cost, up to $500 per 0.5 kW of power capacity. This tax credit expires on Dec. 31, 2016.

Information regarding qualifying products and how to apply for a Federal Tax Credit can be found at the ENERGY STAR Web site.

South Dakota Property Tax Exemption

South Dakota state law SDCL 10-4-44 provides a local property tax exemption for renewable energy systems less than 5 megawatts in size. Wind, solar, biomass, hydrogen, hydroelectric and geothermal systems used to produce electricity or energy are considered renewable resource systems. The continuous exemption applies to the first $50,000 or 70 percent of the assessed value of the renewable energy property, whichever is greater. For geothermal systems that produce energy only and no electricity, such as geothermal heat pumps, the exemption is limited to the first four continuous years for residential facilities and the first three continuous years for commercial facilities. Contact the South Dakota Department of Revenue or your local Director of Equalization for more information.

For More Information
The Tax Incentives Assistance Project (TIAP) gives consumers and businesses practical information to make use of the federal tax incentives.


Rev. 05/30/14