ABSTRACT
In this entry, a framework has been developed to quantify the financial and fiscal incentives (FIs) offered by federal and state agencies to promote renewable energy technologies. This enables studying the effect of FIs on the LCC of electricity generated from the PV and wind power systems. The state-offered FIs considered are sales tax exemption on the purchase of system components, property tax exemption, income tax rebate, and capital subsidy on the system cost. The FIs offered by the federal agencies are the accelerated depreciation for capital recovery, the production tax incentive, and the income tax rebate. For the residential PV system, the state offered upfront capital subsidy on the system cost and avoided cost of electricity due to onsite power generation contribute in reducing electricity cost (LCC) by 65%. Similarly, the LCC of electricity from the 50 MW wind power project is significantly reduced when the FIs are considered. The accelerated depreciation for capital cost recovery and the production tax credit contribute in reducing the cost of electricity by 65%. The LCC of electricity generated from the PV and wind-based energy systems could be significantly less than that generated from coal power projects when the effects of financial incentives are considered.
