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The purpose of the Alternative Energy Revolving Loan Program is to provide a financing option to Montana homeowners, small businesses, schools, local governments and non-profits to install alternative energy systems.
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Montana
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Alternative Energy Revolving Loan Program
In May 2001, Montana Governor Judy Martz signed Senate Bill 506, which established a revolving loan fund to provide loans to homeowners, small businesses (defined as less than 500 employees), schools, local governments, and non-profits for the development of alternative energy sources. The Alternative Energy Revolving Loan Program, which is administered by the Department of Environmental Quality (DEQ), is funded by penalties for air quality violations. Any interest earned by the account and any funds generated from a loan repayment must be deposited into the account and used to sustain the program. Eligible alternative energy sources include landfill gas, solar, wind, small hydro power, and fuel cells.
The maximum loan amount is $40,000 (subject to available funds) with a repayment period up to ten years. Additionally, SB 50 allowed energy conservation measures to be financed when installed with an eligible renewable energy project. Interest rates are set annually and are fixed for the term of the loan. The rate for 2008 is 5.0 percent.
DEQ will accept and evaluate loan applications year round for technical merit and probability of loan repayment. If adequate funds are projected to be available for the estimated pool of applicants, funds may be issued immediately upon approval. If DEQ anticipates that applications will exceed the projected funds available for the year approved projects will be ranked based on a number of criteria, such as system reliability, return on investment, and avoided fossil fuel consumption. Once a loan is approved, the applicant will be informed as to whether funds are currently available, and if not, when new funds are anticipated. If no funds are available, the application will remain active for one year.
Tax Exemptions
Montana offers several types of tax incentives to encourage development of renewable energy systems.
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Generation Facility Corporate Tax Exemption: Less Than 1 MW
Electricity generating facilities built in Montana with a capacity of less than 1 MW are exempt from property taxes for five years after the start of operation. To qualify for the exemption the generation facility must be powered by an alternative renewable energy source, including landfill gas. The assessed value of personal property is adjusted yearly based on a trend factor that reflects the relevant rate of inflation and on the Department of Revenue’s depreciation schedule. State property tax exemption forms are available at the Department of Revenue’s county office.
Corporate Property Tax Reduction for New/Expanded Generating Facilities: More Than 1 MW
Montana generating plants producing 1 megawatt or more by means of an alternative renewable energy source, such as landfill gas, are eligible for the new or expanded industry property tax reduction. The approved facility is taxed at 50 percent of its taxable value in the first five years after the construction permit is issued. Each year thereafter, the percentage is increased by equal percentages until the full taxable value is attained in the tenth year. The assessed value of real property is adjusted every five years to reflect market trends, and the assessed value of personal property is adjusted yearly based on a trend factor that reflects the relevant rate of inflation and on the Department of Revenue’s depreciation schedule.
Renewable Energy Systems Exemption
Montana’s property tax exemption for non-fossil forms of energy generation equipment or low-emission wood or biomass combustors may be claimed for 10 years following the installation of the property. The exemption is allowed for a non-residential structure of up to $100,000 in value. Use Montana Department of Revenue form AB-14 (PDF, 1 pp., 23 KB) to claim this exemption.
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