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In 2007, South Carolina enacted the Energy Freedom and Rural Development Act, which included a provision to amend previous legislation concerning the landfill methane tax credit.

South Carolina

• Biomass Energy Tax Credit
• Biomass Energy Production Incentive

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Biomass Energy Tax Credit

In 2007, South Carolina enacted the Energy Freedom and Rural Development Act, which included a provision to amend previous legislation concerning the landfill methane tax credit. Beginning July 1, 2007, taxpayers are allowed a credit toward income taxes or license fees for 25 percent of the purchase and installation costs of equipment used to create heat, steam, electricity, or other forms of energy fueled by at least 90 percent of a biomass resource, such as landfill gas. The energy must be used for commercial purposes. Unused credits may be carried forward for 15 years.

In order to claim the credit, the costs must be certified by the State Energy Office, in consultation with the Department of Agriculture and the South Carolina Institute for Energy Studies. The total claims for all taxpayers for a fiscal year may not exceed $650,000. To the extent that the claims exceed $650,000, the credit will be allocated proportionately among all taxpayers.

Biomass Energy Production Incentive

Effective July 1, 2008, the Energy Freedom and Rural Development Act provides production incentives for certain biomass energy facilities, of which landfill gas is eligible. Qualified systems earn $0.01 per kilowatt-hour for electricity generated and $0.30 per therm for methane gas produced from biomass resources. These incentives are available to systems that did not produce energy from biomass resources before June 30, 2008, or systems that increase production by at least 25 percent over their greatest three-year average before June 30, 2008.

The maximum incentive is $100,000 per taxpayer per year. Incentives are applicable for the first five years after being placed in service. However, no incentives will be awarded beyond June 30, 2018.