SECTION 2. BACKGROUND

.01 Section 25D provides a tax credit to individuals for residential energy efficient property. Section 1122 of Division B of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111–5, amended

section 25D for taxable years beginning after December 31, 2008. The amount of a taxpayer’s section 25D credit for a taxable year beginning after December 31, 2008, is equal to the sum of the following:

(1) 30 percent of the qualified solar electric property expenditures made by the taxpayer during the taxable year;

(2) 30 percent of the qualified solar water heating property expenditures made by the taxpayer during the taxable year;

(3) The lesser of— (i) 30 percent of the qualified fuel cell property expenditures made by the taxpayer during the taxable year; or

(ii) $500 for each half kilowatt of capacity of the qualified fuel cell property to which the expenditures relate;

(4) 30 percent of the qualified small wind energy property expenditures made by the taxpayer during the taxable year; and

(5) 30 percent of the qualified geothermal heat pump property expenditures made by the taxpayer during the taxable year.

.02 Section 25D(g) provides that the credit applies to residential energy efficient property placed in service before January 1, 2017.