The Emergency Economic Stabilization Act of 2008 includes tax incentives to help minimize the cost of hydrogen and fuel cell projects. It offers an investment tax credit of 30% for qualified fuel cell property or $3,000/kW of the fuel cell nameplate capacity (i.e., expected system output), whichever is less. The equipment must be installed by Dec. 31, 2016. In addition, it features a credit of 10% for combined-heat-and-power-system property.
The American Recovery and Reinvestment Act of 2009 expanded incentives to encourage the installation of fuel cells and hydrogen fueling infrastructure. Incentives included:
A fueling facility tax credit, which increased the dollar cap of the 30% hydrogen fueling infrastructure tax credit from $30,000 to $200,000 until December 31, 2010.
Grants for energy property (in lieu of tax credits), which allowed facilities with insufficient tax liabilities to apply for grants instead of claiming investment or production tax credits. Only entities that paid taxes were eligible. This program was funded through December 31, 2011.
A manufacturing credit, which created a 30% credit for investment in property used for manufacturing fuel cells and other technologies. No additional funding for the program is available at this time.
A residential energy-efficiency credit, which raised the investment-tax-credit dollar cap for residential fuel cells in joint occupancy dwellings to $3,334/kW.
Learn More about Federal Incentives
These publications provide more information about federal incentives for hydrogen and fuel cell projects.
Fuel Cell Financing for Tax-Exempt Entities: Facilitating deployments by structuring energy service contracts to include the Energy Investment Tax Credit — This fact sheet describes how tax-exempt entities can indirectly benefit from the energy investment tax credit for the installation of fuel cell systems.
Fuel Cell Tax Incentives: How Monetization Lowers the Government Outlay — This presentation by Lee Peterson of the Reznick Group was given at a meeting of the Hydrogen and Fuel Cell Technical Advisory Committee in February 2009.
Investment Tax Credit Role in U.S. Fuel Cell Projects: Case Study with a Department of Defense Facility — This presentation by Sam Logan of Logan Energy was given at a meeting of the Hydrogen and Fuel Cell Technical Advisory Committee in February 2009.
A number of states offer incentives for the installation of fuel cells and hydrogen energy systems.
To determine what's available in a given state, visit the Incentives and Laws section of the Alternative Fuels and Advanced Vehicles Data Center or the Database of State Incentives for Renewables and Efficiency.