FAQs for Small Premium Projects
|1. Why aren’t all small energy conservation projects eligible to receive a tax credit as a Small Premium Project (SPP)? |
Fewer tax credit dollars are available for energy conservation projects incentives. The Oregon Department of Energy has raised the bar for energy conservation projects that will be eligible to receive tax credits. The categories of non-competitive projects receiving tax credits under SPP have been selected based on well-established premium-performance energy conservation, an abundance of regional performance, and cost documentation and compatibility with a prescriptive incentive process.
2. What does prescriptive mean? How is a prescriptive tax credit more streamlined?
A prescriptive incentive means a pre-determined incentive amount based on typical savings and costs. Qualifying energy performance is established by regional studies of typical energy use instead of a complicated, case-by-case engineering analysis. A prescriptive incentive is awarded based on the number and capacity of installed units. As a result, this makes the application, review and awarding processes more streamlined. Expensive and time-consuming custom engineering is unnecessary. This simplified approach allows for a high volume of projects to receive incentives in a short time while saving effort and funds for both Oregonians and the State of Oregon.
3. Can an owner apply for a single large project within an opportunity announcement period (12 months) by phasing the project into multiple applications?
No. SPP is limited to small projects, so an owner cannot break a larger project into smaller project applications within an opportunity announcement period (see OAR 330-210-0070 through 330-210-0070(5)). If multiple applications meet all three of the following conditions within an opportunity announcement period, the applications are considered collectively as a single project by the department:
- Shares the same structure or building as a previous SPP application
- Shares the same opportunity announcement as a previous SPP application
- Shares the same owner as a previous SPP application
Projects that phase or break up work, while meeting the three limiting conditions, are still considered a single project and will be limited to a maximum of $7,000 of tax credit per opportunity announcement period. Given these limitations, a project large enough to break into phases should apply for a tax credit within the competitive conservation project categories.
4. Can an owner receive more than $7,000 of cumulative tax incentive within an opportunity announcement period (12 months) by submitting distinct and different projects?
No. An owner is restricted to $7,000 of cumulative tax credit for a SPP during an opportunity announcement period.
5. The SPP program lists 13 tax credit categories within in the first opportunity announcement. Will the EIP offer any more SPP categories in the future?
Yes, and that will happen two ways: 1) Expansion of the SPP offering due to regional energy savings and market trends, 2) From new ideas proposed by the public. Please watch the website as additional information is made available.
6. The previous BETC program had a variety of cost classifications (e.g. qualified costs, certified costs) that affected the outcome of the awarded incentive. Is this the case for SPP?
7. Is an electronic balance transfer or a print-out from the state financial management system an acceptable form of payment for SPP fees?
No. All fee payments must be in the form of a check or a credit card.
8. Can the SPP technical specifications listed in the opportunity announcement be modified to accommodate the requirements of my specific project?
No. All applicants must comply with the program requirements. Projects that do not fit into the SPP requirements are encouraged to enter the competitive process for energy conservation tax credits. Please see the schedule for when incentives are available at: http://www.oregon.gov/ENERGY/BUSINESS/Incentives/
9. If an eligible tax credit project were part of a lease agreement, can the project apply for a tax credit?
10. Who would claim the tax credit described above?
Either the owner or lessee may claim the tax credit. The parties to the lease should agree who will apply and claim the tax credit. In a case where a lessee claims the tax credit, and the lease expires or is terminated during the period of the tax credit, the credit may need to be revoked and re-issued based on ORS 315.331 (4).
11. How does the program differentiate separate and distinct projects on a single property or site? For example, a rental property might be on one site but have several separate rental residences.
If multiple SPPs within an opportunity announcement period occur on the same physical site but they have separate legal mailing addresses, the program considers these distinct and different. Each distinct address must have separate utility metering and utility billing accounts. In the example of the multi-family rental property, each rental would be considered distinct as long as the addresses were different and they each had their own utility meters and accounts.
12. Are SPP projects required to participate in a sustainable building program such as LEED or Green Globes?
No. The LEED and Green Globes types of programs are only applicable to new construction projects and total building retrofit projects.
|Building Envelope Thermal Improvement|
|1. The SPP tax credits available for weatherization projects do not appear to be based on a direct 35 percent of total project costs our business charges. Why aren’t the amounts higher? |
There is no statutory 35 percent tax credit. Under HB 3672, ODOE has discretion in how it allocates the cap and is allowed to provide for credits less than 35 percent, provided credits do not exceed 35 percent. In order to incentivize premium projects that go above and beyond conventional practice and result in the greatest energy savings while ensuring the program stays below the cap, we developed the SPP process that allows for streamlined processing with prescribed incentives based on the typical incremental costs within Oregon. If project owners do not want to pursue a prescribed incentive, they can submit their projects through the competitive process when the appropriate opportunity announcement period opens.
2. The technical specification calls for insulating behind the “weight cavity” of a closed system when replacing double-hung windows. Due to the physical nature of the space, this is very difficult to complete without tearing apart the entire cavity (replacing the sash or removing interior trim). This requirement is more akin to invasive remodeling not weatherization. This requirement creates a hardship on weatherization installers and unnecessarily increases project costs. Can this item be removed from the specification?
Regarding weight cavities, we intend to address this opportunity for improvement however reasonable access is assumed. If there is not reasonable access, it should be noted in the application.
3. Why are entry doors not included in the SPP program?
The new program has raised the bar and limited the types of project that are included as a SPP. Some measures that qualified under the old BETC program no longer are eligible and some measures are eligible only when higher standards are met. In order to accomplish this, minimum standards have been set to allow only projects that are of a level high enough that ODOE can be confident that program statute, rules, and goals are met with minimal review. Doors were not selected when compared to the other options that are currently offered. Envelope measure, including doors, may apply in the regular conservation program where a custom project may be presented and analyzed.
4. Large weatherization projects can’t participate in SPP. Can a large weatherization project receive a tax credit under the EIP?
Yes. Large building envelope projects are eligible to compete in the Conservation-Building Envelope competition. Please see the following webpage for a schedule of EIP Opportunity Announcements. http://www.oregon.gov/ENERGY/BUSINESS/Incentives/
5. Will weatherization projects that choose to enter into the competitive EIP path for tax incentives instead of going through SPP, receive the same prescriptive tax credits offered under SPP?
No. Projects that receive approval in the Conservation Building Envelope category will be awarded a tax credit based on 35 percent of eligible costs. This will be 35 percent of total eligible costs uniquely demonstrated for each winning project. Since tax credits awarded under the competitive categories are not prescriptive, the incentive will be unique to the project itself. Competitive projects may also apply for energy conservation measures that are not presently offered under SPP.
6. Are knee walls that receive insulation per the specification eligible for a tax credit?
Yes. The area of the insulated knee wall that meets the thermal envelope improvement requirements can be counted for a tax credit.
7. When calculating the tax credit for insulating a vaulted ceiling, do I use the area of the actual ceiling surface or the slightly smaller floor area below shown on a floor plan?
The actual ceiling area is counted for a tax credit.
8. If there are attic areas that cannot meet R-49 due to physical restrictions (such as sloped ceilings between a rake attic and a crown, or a small decked storage area) but are insulated as best as practical, do those areas count toward the eligible square footage?
No. The incentive may only be counted for areas that are installing the prescribed insulation values.
9. For weatherization projects that include replacing existing HVAC ductwork, can the project claim a tax credit for replacing leaky ductwork?
No. This tax credit is available for projects replacing uninsulated flex duct with R-8 insulated flex duct or replacing rigid ductwork with an R value less than R-2 (not derated due to damage) with new R-11 duct insulation.
|High Performance Homebuilding|
1. Can Oregon High Performance Home projects that participated under the previous BETC program receive SPP tax credits?
No. Projects that have received BETC tax credits may not receive EIP tax credits.
2. Is there a waiver for SPP High Performance Home building projects that take longer than 12 months to complete construction after the informational filing form is submitted?
No, there isn’t an arrangement for that condition. However projects that haven’t yet begun construction may reapply with a new informational filing form. Projects that have begun construction may also reapply with a new informational filing form and a request for waiver of project start date. A waiver would only be granted if the applicant can demonstrate pressing circumstances beyond the builder’s control that lead to a delay in completing construction, thus requiring a reapplication of the informational filing form. Please be advised, all filing fees are non-refundable regardless of whether a request for waiver is approved or rejected.
3. I’m planning to build a home that exceeds the standards listed in the SPP technical specifications for High Performance Homebuilding. Is this project eligible to receive an incentive under High Performance Homebuilding?
Yes. Projects that exceed the building requirements listed in the specification are eligible to receive a tax credit as long as they can demonstrate compliance with one of the prescriptive standards listed and the project is verified and labeled under Northwest ENERGYSTAR Homes. It is recommended that the builder confirm with the creator of the standards (e.g. Energy Trust Homes Program, Northwest ENERGYSTAR homes) that the proposed project is indeed meeting all requirements in the chosen specification.
4. Does the High Performance Homebuilding program allow homes other than single family residences to participate?
Yes, as long as the size of the project doesn’t exceed the program cap of $7,000. This could include duplexes, small multi-plexes, rentals, small multi-family and custom built homes.
5. I’m a custom homebuilder interested in building a high performance home that will meet the specification listed for this program. As a custom homebuilder, I work closely with the home owner and often have the client obtain the permit and building materials in their name. Am I eligible for a tax credit?
Yes. The homebuilder would be eligible for a tax credit. The homeowner would not be eligible for a tax credit under this program. The documentation at final application would need to make clear the relationship between the custom homebuilder and the owner and clearly designate the homebuilder as the recipient of the tax credit.
6. For the “Option 1: Oregon Premium Performance Home” path, is there an exception to allow one door for each home (e.g. a wood front door) to not meet the U-020 door insulation standard?
No. The current construction specifications are limited to the prescribed values listed in the opportunity announcement. However, we will take this suggestion under consideration.
7. Can a homebuilder who constructs a high performance home and sells it to an employee of the company be eligible for a tax credit under the SPP program?
Yes. The high performance homebuilding program is for homebuilders constructing homes intended for sale to the end-use homebuyer. As long as there is a legal contract and transaction between the homebuilder and the homebuyer, the homebuilder would be eligible to receive a tax credit for the project. Projects like this will be expected to provide documentation (copies of the contract, bill of sale, and deed) with the final application.
8. Can a homebuilder, who has been issued an EIP tax credit certificate, take the credit in one year or does it need to be deducted over four years in four equal parts?
If the cost of project does not exceed $20,000, either way is fine; otherwise the credit is claimed over five years. ORS 315.331(1)(b) states for EIP conservation projects, “If the certified cost of the facility does not exceed $20,000, the total amount of the credit allowable under subsection (3) of this section may be claimed in the first tax year for which the credit may be claimed, but may not exceed the tax liability of the taxpayer.” In matters related to tax preparation, ODOE recommends that you seek guidance from a qualified tax preparation professional.
|1. Can SPP projects use a pass-through partner in claiming a tax credit? Is the program going to help me find a pass-through partner for my project? |
Yes, SPP projects can elect to transfer their tax credit to another party with an Oregon tax liability using the pass-through option. However all of the eligible tax credit must be claimed in one year. The pass-through rate (i.e. discount rate or the rate that must be paid to the project owner before the credits are transferred) of the project will be assigned at the time of informational filing for that project. Once assigned, this rate will not change.
Applicants may locate their own pass-through partner(s) or voluntarily pay to receive assistance from the program in locating a pass-through partner. While the program can help find a pass-through partner, it cannot guarantee applicants a pass-through partner. The fees for pass-through and pass-through, with assistance, are posted on the program webpage at: http://www.oregon.gov/ENERGY/BUSINESS/Incentives/docs/Incentives-FinalFeetable.pdf.
|LED Outdoor Lighting|
|1. Why aren’t all types of lighting projects, like T12 retrofits, included in SPP? |
To meet the requirements of HB 3672 and current state budgetary planning, eligible SPP projects are limited to premium efficiency technologies that are not standard industry practice. Lighting system improvements projects replacing existing, inefficient T12 fixtures with T8 or T5 fixtures have become standard industry practice. Lighting projects that do not fit into the available SPP categories are welcome to compete in the open competitions and claim energy savings provided with respect to the Oregon energy code.
2. Are LEDs for use in exterior signage (e.g. facade lighting, on-premise signage, lights, outdoor dome and gooseneck lights, advertising luminaires, landscape fixtures, neon signs) eligible for an SPP tax credit?
No. This SPP offering is aimed at the replacement of existing HID outdoor street lamp fixtures.
|Premium Efficiency Electric Air Conditioning Equipment|
|1. The technical specification mentions service life limitations for replacing existing AC equipment with premium efficiency equipment. Is there an easy to locate source for the EIP’s equipment service life requirements for unitary equipment? |
At the time of this writing, the latest version of 2011 ASHRAE HVAC Applications handbook lists industry standards for median AC equipment service life under chapter 37, “Owning and Operating Costs,” table 4.
2. ASHRAE Technical Committee TC 7.8 has developed an interactive web-based database focusing on equipment service life and annual maintenance costs for a variety of building types and HVAC systems under AHSRAE research project 1237-TRP. Does the EIP recognize the median service life values for equipment in this database?
Presently the EIP recognizes the published service life data listed in 2011 ASHRAE HVAC Applications handbook. After considering the implications of adopting service life data from AHSRAE research project 1237-TRP, the EIP is willing to accept these median service life values for SPP. The AHSRAE research project 1237-TRP lists the following median service lives for AC equipment in the United States:
- Air cooled DX rooftop units........Median service life = 18.5 years
- Heat pump air to air...................Median service life = 14.0 years
- Split DX System.........................Median service life = 19.0 years
|Heat Pump Service Water Heating|
|1. As a homebuilder, I am planning a High Performance Homebuilding project. Would this project also be eligible for an additional SPP tax credit if I installed a Heat Pump Service Hot Water Heater? |
EIP applicants cannot receive multiple tax credits for the same piece of equipment. However, a homebuilder could receive a separate tax credit for Heat Pump Service Hot Water Heating if it was not required under the High Performance Homebuilding specification used. In the case of homebuilding, the applicant needs to confirm before applying that the planned heat pump service hot water heater is not required within the High Performance Homebuilding option that will be built.
|Ductless Heat Pump with Variable Refrigerant Flow|
|1. Why does ODOE require small capacity DHP jobs to comply with the installation and load calculation requirements listed in the opportunity announcement?|
ODOE utilizes industry best practices such as load calculations well known to Oregon contractors and that offer the best long term operation, efficiency and value to customers.
|Agricultural Irrigation System Improvement|
|1. Are hydrokinetic turbines included in the SPP offering for irrigation systems? |
No. The current measures are limited to direct pump energy conservation measures. However this suggestion will be taken under advisement as future SPP tax credits are planned.
|Industrial Piping Insulation|
1. Can I request a tax credit for insulating my low-pressure, steam boiler condensate return system piping?
No. This is because the typical range of steam condensate is higher than the range of eligible temperatures listed in the specifications for the SPP industrial piping insulation projects.
1. Is the informational filing form all I need to send in for my tax credit?
No. The informational filing form is the first step of the SPP tax credit application process. It is sent in before your project starts construction. Upon completing your project, the final application form must be sent to ODOE to apply for your tax credit. This must be done within 12 months of filing the initial informational filing form.
2. Can a project start construction and then submit an informational filing afterwards?
No. All projects are required to submit an informational filing before starting construction. Under rare circumstances, the informational filing form could be accepted after the start of construction. A request for “waiver of project start date” would be required to accompany the informational filing form. This is not a guarantee that project would be accepted. Please be advised, all filing fees are non-refundable regardless of whether a request for waiver is approved or rejected.
3. Under what circumstances may a project be granted a “waiver of project start date” for informational filing?
The action of installing an energy conservation measure demonstrates that it made financial sense to the owner regardless of an incentive. In the rare case where a waiver to informational filing would be approved, the project owner would demonstrate pressing circumstances or compelling business reasons. Starting the project before the new SPP were available in the EIP would not be an acceptable reason to waive informational filing. Please be advised, all filing fees are non-refundable regardless of whether a request for waiver is approved or rejected.
|Final Application Form|
1. If I submit an informational filing form for my project, how will I know that there is any incentive money still available?
The SPP webpage will post how many tax credit dollars are still available and unreserved. Informational filings received while unreserved tax credits are available will get a postcard confirming receipt of the informational filing form and that the tax credit amount applied for will be held in reserve.
Once the reserved tax credit dollars have run out, the SPP webpage will indicate that the opportunity announcement is closed. Any applications received after SPP Opportunity Announcement closure will be returned along with the filing fee. The reserved tax credit dollar amount and the SPP Opportunity Announcement status will be posted under Small Premium Projects at: http://www.oregon.gov/ENERGY/BUSINESS/Incentives/
2. Can an owner who has been issued an EIP tax credit certificate, but is unable to use the entire certified tax credit amount within the first year, roll over the remaining unused amount into the following tax year?
Yes. ORS 315.331(6) states for EIP conservation projects, “Any tax credit otherwise allowable under this section that is not used by the taxpayer in a particular year may be carried forward and offset against the taxpayer’s tax liability for the next succeeding tax year. Any credit remaining unused in that next succeeding tax year may be carried forward and used in the second succeeding tax year, and likewise, any credit not used in that second succeeding tax year may be carried forward and used in the third succeeding tax year, and likewise, any credit not used in that third succeeding tax year may be carried forward and used in the fourth succeeding tax year, and likewise, any credit not used in that fourth succeeding tax year may be carried forward and used in the fifth succeeding tax year, but may not be carried forward for any tax year thereafter. Credits may be carried forward to and used in a tax year beyond the years specified in subsection (1) of this section only as provided in this subsection.” However, in matters related to tax preparation, ODOE recommends that you seek guidance from a qualified tax preparation professional.