Renewable energy tax exemptions are a broad class of incentives which exempt individuals or businesses engaged in research, development, or the use of renewable energy technologies from certain taxes. 

For businesses, these tax exemptions might include employee payroll taxes, property taxes on renewable energy equipment, and other taxes depending on the exact provisions of the legislation. For individuals, they can include exemptions from state sales taxes on renewable energy equipment purchases (e.g. wind turbines or photovoltaic systems) as well as exemptions from value-added property taxes for their power generating systems. The monetary value of these exemptions obviously varies depending on what the initial tax rate is, but the savings can be significant considering the large purchase costs of renewable energy systems.

Michigan has recently begun offering a limited series of tax exemptions under the Michigan Next Energy Authority Act of 2002 which provides property tax exemptions on renewable energy equipment for companies engaged in research, development, or production of renewable energy technologies.  This exemption does not apply to private citizens; it serves as a minor incentive promoting industrial recruitment and commercialization of alternative energy technologies. Companies must apply for the exemption on an annual basis and applications are subject to approval by the Michigan Next Energy Authority.

In addition, the Next Energy Authority Act also mandated the creation of the Next Energy Zone in the Wayne State University Research and Technology Park located in Detroit . This zone will be home to the Next Energy Center, a dual research and office complex dedicated to pursuing alternative energy solutions. Companies operating within the zone are eligible for additional tax exemptions including employee payroll taxes and the state education tax. The complex is scheduled to be completed by spring 2005. At the moment, research interests appear to be centered on hydrogen production technology and fuel cell technology.

Wind Power in the Western Upper Peninsula