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Tax Credits & Energy Programs



 Overview

​The 1995 Budget Accountability Act (OR​S 291.201) defines a tax expenditure as: any law of the Federal Government or of this state that exempts, in whole or in part, certain persons, income, goods, services, or property from the impact of established taxes, including, but not limited to tax deductions, tax exclusions, tax subtractions, tax exemptions, tax deferrals, preferential tax rates, and tax credits.

The term "tax expenditure" derives from the parallel between these tax provisions and direct government expenditures. For example, a program to encourage businesses to purchase pollution abatement equipment could be structured with an incentive in the form of a tax credit or a direct payment by the state to businesses. 

Tax expenditures can be viewed as: (1) providing financial assistance to certain groups of taxpayers, (2) providing economic incentives that encourage specific taxpayer behavior, or (3) simplifying or reducing the costs of tax administration. While the third of these policy objectives eliminates inefficiencies within the tax code, the first two could be implemented with direct expenditures rather than tax expenditures​.​

The biennial tax expenditure report accompanies the Governor's recommended budget submitted to the Legislature before each session. It describes provisions of Oregon tax laws that impart special treatment to a group of taxpayers, such as exclusions, credits, deductions, and exemptions. 

This report describes each provision and provides revenue loss estimates and evaluations of effectiveness. It also includes summary tables that group tax expenditures according to tax program and budget program/function. See ORS 2​91.203​ for the statutory reference that requires these reports.


The Department of Revenue (DOR) provides access to current and historical tax expenditure reports, and other tax and statistical report information. 

DOR Statistical Reports
 
For additional information, email the Dept. of Revenue Research Section at dor.research@oregon.gov.



 Energy Programs

Description
The Oregon Department of Energy's Solar + Storage Rebate Program offers rebates for solar and solar with paired storage projects. For residential projects, the maximum rebate is $5,000 for a solar electric system and $2,500 for an energy storage system. For low-income service providers, the caps are $30,000 for solar electric and $15,000 for an energy storage system. Rebates may cover up to 40 percent of the net cost for a residential system installed for a customer that is not considered low- or moderate-income, up to 60 percent of net cost for a low- or moderate-income customer, and up to 50 percent for a low-income service provider.

The funding for the program comes from State General Fund. Rebates recipients are the solar contractors who install the system(s), as reflected in the data set. Contractors pass the savings on to their customers. This report covers rebates that were issued for the program as of June 30, 2021.

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Solar Plus Storage Rebate Program
Description
The Oregon Department of Energy's Energy Incentive Program issued tax credits to Oregon businesses, public agencies, and nonprofits that invested in energy conservation or transportation projects. The Energy Incentive Program tax credits ended (sunset) 
at the end of the 2017 tax year, which was dependent on the applicants' tax year. 

While the program sunset in 2017 and is no longer accepting applications, reporting will continue until projects with multi-year tax credits/recertification's are complete. This report covers July 1, 2015 through June 30, 2021. Withdrawn, Denied, Inactive, and Expired projects are excluded. 

Notes

*The report shows tax credits issued and may differ from tax credits allowed due to rounding.
* Commercial conservation projects with project costs under $20,000 were administered under the Small Premium Projects (SPP) program.
For SPP projects, ODOE used predetermined tax credit amounts based on a project's anticipated energy savings, up to a maximum credit of $7,000 per project. The tax credit could not exceed 35 percent of the certified costs.
* Commercial, agricultural, and industrial conservation projects with project costs greater than $20,000 were administered through a competitive process.

* Tax credits offered through the transportation program could go to fleets for projects that replaced or modified two or more vehicles to use alternative fuels, or to projects that installed or constructed a facility for mixing, storing, compressing, or dispensing fuels for alternative fuel vehicles, including electric charging, compressed natural gas, and propane fueling stations. ​

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Energy Incentive Program (EIP) Tax Credits ​
Description
​The Oregon Department of Energy issued grants for renewable energy development projects from 2012 to 2019; the grants were funded through tax credit auctions overseen by the Oregon Department of Revenue. The final set of RED Grant awardees was announced in September 2019. 

ODOE awarded RED Grants up to a maximum of $250,000 per project, not to exceed 35 percent of eligible project costs. The grants were available through a competitive process to entities that invest in renewable energy systems. Grant dollars are not approved or distributed until completion of the project. 

While the program does not expect to have additional grant funds available, reporting will continue until all awarded projects are completed and disbursed, denied, or withdrawn. This report covers RED Grants approved before June 30, 2021.

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Renewable Energy Development (RED) Grants
Description
​The Oregon State legislature passed House Bill (HB) 2066 in 2017. This bill moved a portion of the Biomass Collector or Producer Tax Credit program from the Oregon Department of Energy to the Oregon Department of Agriculture (ODA).  

Bovine Manure Tax Credit (Sections 6 through 11 of HB 2066) requires ODA to administer tax credit certifications to qualified bovine manure producers or collectors that produce biofuels. 

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Bovine Manure Tax Credits