Financial Incentives for a Hydrogen Fuel Cell Microgrid
Funding a Hydrogen Microgrid
Now is the time to invest in hydrogen power. Incentives are available to cover 30%-80% of the system costs in the form of rebates, tax credits, and grant programs. Rebates can be claimed during or after purchase, while tax credits are claimed when filing income taxes.
For the most up-to-date information, review the sponsoring entity’s website directly for details on eligibility, redemption, and program details.
Federal Hydrogen Incentives
Residential Clean Energy Credit
Up to 30% for property placed in service after December 31, 2021, and before January 1, 2033
Up to 26% for property placed in service after December 31, 2032, and before January 1, 2034
Up to 22% for property placed in service after December 31, 2033, and before January 1, 2035
Rural Energy for America Program (REAP)
The program provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for the installation of renewable energy systems or making energy efficiency improvements. Agricultural producers may also apply for new energy-efficient equipment and new system loans for agricultural production and processing.
- Loan guarantees on loans up to 75% of total eligible project costs.
- Grants for up to 50% of total eligible project costs.
- Combined grant and loan guarantee funding up to 75% of total eligible project costs.
Grid Resilience and Innovation Partnerships (GRIP)
A $10.5 billion program to enhance grid flexibility and improve the resilience of the power system against growing threats of extreme weather and climate change. The GRIP program will run from Fiscal Year 2022 through 2026 and will include two funding opportunities. The first funding opportunity includes up to $3.46 billion for 58 projects across 44 states, and the second funding opportunity includes up to $3.9 billion for Fiscal Years 2024 and 2025.
Grid Resilience State and Tribal Formula Grants Program
A non-competitive program that provides funding to states, territories, and federally recognized Indian tribes to improve the resilience of their power grids. The program is administered by the Indiana Office of Energy Development (OED) and is funded through the Bipartisan Infrastructure Law. The program distributes funding over five years based on a formula that includes factors such as population size, land area, and the probability and severity of disruptive events.
Advanced Energy Project Credit
Extends the 30% investment tax credit and creates funding for manufacturing projects producing fuel cell electric vehicles, hydrogen infrastructure, electrolyzers, and a range of other products:
- Expands tax credit to include projects at manufacturing facilities wanting to reduce their greenhouse gas emissions by at least 20%.
- Tax credit is funded at $10 billion for eligible projects.
- Can be applied to retrofitting facilities for low-carbon industrial heat, carbon capture, transport, utilization, and storage systems, and equipment for recycling, waste reduction, and energy efficiency.
Clean Hydrogen Production Tax Credit
Creates a new 10-year incentive for clean hydrogen production tax credit with up to $3.00/kilogram. Projects can also claim up to a 30% investment tax credit under Section 48.
Elective Payment for Energy Property
Adds an election for direct pay provisions to a range of tax credits including the clean hydrogen production credit, the energy investment tax credit, the carbon capture and sequestration credit, alternative fuel vehicle refueling property credit, advanced energy project credit, and others:
- Allows direct payments to be made in lieu of a reduction in tax liability ("direct pay") and/or an option to monetize the credits by transferring them to an entity with greater tax liability ("transferability").
- Direct pay is limited to certain tax-exempt and governmental entities for most of the eligible tax credits.
- This limitation does not apply to the first 5 years of the Section 45V clean hydrogen credit, Section 45Q carbon capture and sequestration credit, and Section 45X advanced manufacturing credit.
- Direct pay expires at the end of 2032.
Energy Credit
Extends the 30% fuel cell investment tax credit through 2024 before a transition to the technology-neutral Clean Energy Investment Credit, which begins in 2025. Can receive a bonus for domestic sourcing of materials and siting projects in "energy communities".
Energy Storage Credit
Adds a new provision to the energy investment tax credit for energy storage, including hydrogen storage, available through 2025 before a transition to the Clean Energy Investment Credit.
State Hydrogen Incentives
State government incentives provide a lucrative addition to federal savings. Programs vary from state-to-state, but our team can help you identify the most beneficial state incentives for your Oncore Microgrid system.
Database of State Incentives for Renewables & Efficiency (DSIRE)
DSIRE is the most comprehensive source of information on incentives and policies that support renewable energy and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.
DOE Alternative Fuels Data Center
Find federal and state laws and incentives for alternative fuels and renewable energy topics.
Eligibility
These incentives are listed for your convenience and should not be considered an absolute or complete list. Your personal eligibility, the incentive’s availability, and qualifying requirements cannot be guaranteed. We recommend speaking with a tax professional for authoritative guidance.
These programs are subject to change or end at any time, and are outside Oncore Microgrid's control. For example, some programs have an allocated budget or submission deadline after which the program will end. Be sure to visit the specific program’s website for the most up-to-date information on availability, eligibility, and redemption requirements.
Oncore Microgrid cannot guarantee system installation or permission to operate by a specific date or incentive deadline.