1074 
HR 6 PAP 
ceding the taxable year in which the credit is deter-
mined. 
‘‘(4) GROSS
RECEIPTS.—For purposes of this 
subsection, the rules of paragraphs (2) and (3) of sec-
tion 448(c) shall apply. 
‘‘(f) DEFINITIONS.—For purposes of this section— 
‘‘(1) QUALIFIED
ENERGY
EFFICIENT
APPLI-
ANCE.—The term ‘qualified energy efficient appliance’ 
means— 
‘‘(A) any dishwasher described in subsection 
(b)(1)(A), 
‘‘(B) any clothes washer described in sub-
section (b)(1)(B), and 
‘‘(C) any refrigerator described in sub-
section (b)(1)(C). 
‘‘(2) 
DISHWASHER.—The 
term 
‘dishwasher’ 
means a residential dishwasher subject to the energy 
conservation standards established by the Department 
of Energy. 
‘‘(3) CLOTHES
WASHER.—The term ‘clothes 
washer’ means a residential model clothes washer, in-
cluding a residential style coin operated washer. 
‘‘(4) REFRIGERATOR.—The term ‘refrigerator’ 
means a residential model automatic defrost refrig-
1075 
HR 6 PAP 
erator-freezer which has an internal volume of at least 
16.5 cubic feet. 
‘‘(5) MEF.—The term ‘MEF’ means the modi-
fied energy factor established by the Department of 
Energy for compliance with the Federal energy con-
servation standards. 
‘‘(6) EF.—The term ‘EF’ means the energy fac-
tor established by the Department of Energy for com-
pliance with the Federal energy conservation stand-
ards. 
‘‘(7) WF.—The term ‘WF’ means Water Factor 
(as determined by the Secretary of Energy). 
‘‘(8) PRODUCED.—The term ‘produced’ includes 
manufactured. 
‘‘(9) 2001 ENERGY CONSERVATION STANDARD.— 
The term ‘2001 energy conservation standard’ means 
the energy conservation standards promulgated by the 
Department of Energy and effective July 1, 2001. 
‘‘(g) SPECIAL RULES.—For purposes of this section— 
‘‘(1) IN GENERAL.—Rules similar to the rules of 
subsections (c), (d), and (e) of section 52 shall apply. 
‘‘(2) CONTROLLED GROUP.— 
‘‘(A) IN GENERAL.—All persons treated as a 
single employer under subsection (a) or (b) of
1076 
HR 6 PAP 
section 52 or subsection (m) or (o) of section 414 
shall be treated as a single producer. 
‘‘(B) INCLUSION
OF
FOREIGN
CORPORA-
TIONS.—For purposes of subparagraph (A), in 
applying subsections (a) and (b) of section 52 to 
this section, section 1563 shall be applied with-
out regard to subsection (b)(2)(C) thereof. 
‘‘(3) VERIFICATION.—No amount shall be al-
lowed as a credit under subsection (a) with respect to 
which the taxpayer has not submitted such informa-
tion or certification as the Secretary, in consultation 
with the Secretary of Energy, determines necessary.’’. 
(b) CONFORMING AMENDMENT.—Section 38(b) (relat-
ing to general business credit), as amended by this Act, is 
amended by striking ‘‘plus’’ at the end of paragraph (20), 
by striking the period at the end of paragraph (21) and 
inserting ‘‘, plus’’, and by adding at the end the following 
new paragraph: 
‘‘(22) the energy efficient appliance credit deter-
mined under section 45L(a).’’. 
(c) CLERICAL AMENDMENT.—The table of sections for 
subpart D of part IV of subchapter A of chapter 1, as 
amended by this Act, is amended by adding at the end the 
following new item: 
‘‘Sec. 45L. Energy efficient appliance credit’’.
1077 
HR 6 PAP 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to appliances produced after the date 
of the enactment of this Act, in taxable years ending after 
such date. 
SEC. 1527. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT 
PROPERTY. 
(a) IN GENERAL.—Subpart A of part IV of subchapter 
A of chapter 1 (relating to nonrefundable personal credits), 
as amended by this Act, is amended by inserting after sec-
tion 25C the following new section: 
‘‘SEC. 25D. RESIDENTIAL ENERGY EFFICIENT PROPERTY. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an indi-
vidual, there shall be allowed as a credit against the tax 
imposed by this chapter for the taxable year an amount 
equal to the sum of— 
‘‘(1) 30 percent of the qualified photovoltaic 
property expenditures made by the taxpayer during 
such year, 
‘‘(2) 30 percent of the qualified solar water heat-
ing property expenditures made by the taxpayer dur-
ing such year, 
‘‘(3) 30 percent of the qualified fuel cell property 
expenditures made by the taxpayer during such year, 
‘‘(b) LIMITATIONS.—
1078 
HR 6 PAP 
‘‘(1) MAXIMUM
CREDIT.—The credit allowed 
under subsection (a) for any taxable year shall not 
exceed— 
‘‘(A) $2,000 with respect to any qualified 
solar water heating property expenditures, 
‘‘(B) $2,000 with respect to any qualified 
photovoltaic property expenditures, and 
‘‘(C) $500 with respect to each half kilowatt 
of capacity of qualified fuel cell property (as de-
fined in section 48(d)(1)) for which qualified fuel 
cell property expenditures are made, 
‘‘(2) CERTIFICATIONS.—No credit shall be al-
lowed under this section for an item of property un-
less— 
‘‘(A) in the case of solar water heating 
property, such property is certified for perform-
ance by the non-profit Solar Rating Certifi-
cation Corporation or a comparable entity en-
dorsed by the government of the State in which 
such property is installed, and 
‘‘(B) in the case of a photovoltaic property 
or a fuel cell property such property meets ap-
propriate fire and electric code requirements. 
‘‘(c) CARRYFORWARD
OF UNUSED CREDIT.—If the 
credit allowable under subsection (a) exceeds the limitation
1079 
HR 6 PAP 
imposed by section 26(a) for such taxable year reduced by 
the sum of the credits allowable under this subpart (other 
than this section), such excess shall be carried to the suc-
ceeding taxable year and added to the credit allowable 
under subsection (a) for such succeeding taxable year. 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) QUALIFIED SOLAR WATER HEATING PROP-
ERTY EXPENDITURE.—The term ‘qualified solar water 
heating property expenditure’ means an expenditure 
for property to heat water for use in a dwelling unit 
located in the United States and used as a residence 
by the taxpayer if at least half of the energy used by 
such property for such purpose is derived from the 
sun. 
‘‘(2) QUALIFIED PHOTOVOLTAIC PROPERTY EX-
PENDITURE.—The term ‘qualified photovoltaic prop-
erty expenditure’ means an expenditure for property 
which uses solar energy to generate electricity for use 
in a dwelling unit located in the United States and 
used as a residence by the taxpayer. 
‘‘(3) SOLAR PANELS.—No expenditure relating to 
a solar panel or other property installed as a roof (or 
portion thereof) shall fail to be treated as property de-
scribed in paragraph (1) or (2) solely because it con-
1080 
HR 6 PAP 
stitutes a structural component of the structure on 
which it is installed. 
‘‘(4) QUALIFIED FUEL CELL PROPERTY EXPENDI-
TURE.—The term ‘qualified fuel cell property expend-
iture’ means an expenditure for qualified fuel cell 
property (as defined in section 48(d)(1)) installed on 
or in connection with a dwelling unit located in the 
United States and used as a principal residence 
(within the meaning of section 121) by the taxpayer. 
‘‘(5) LABOR
COSTS.—Expenditures for labor 
costs properly allocable to the onsite preparation, as-
sembly, or original installation of the property de-
scribed in paragraph (1), (2), (4), (5), or (6) and for 
piping or wiring to interconnect such property to the 
dwelling unit shall be taken into account for purposes 
of this section. 
‘‘(6) SWIMMING POOLS, ETC., USED AS STORAGE 
MEDIUM.—Expenditures which are properly allocable 
to a swimming pool, hot tub, or any other energy 
storage medium which has a function other than the 
function of such storage shall not be taken into ac-
count for purposes of this section. 
‘‘(e) SPECIAL RULES.—For purposes of this section— 
‘‘(1) DOLLAR AMOUNTS IN CASE OF JOINT OCCU-
PANCY.—In the case of any dwelling unit which is
1081 
HR 6 PAP 
jointly occupied and used during any calendar year 
as a residence by 2 or more individuals the following 
rules shall apply: 
‘‘(A) The amount of the credit allowable, 
under subsection (a) by reason of expenditures 
(as the case may be) made during such calendar 
year by any of such individuals with respect to 
such dwelling unit shall be determined by treat-
ing all of such individuals as 1 taxpayer whose 
taxable year is such calendar year. 
‘‘(B) There shall be allowable, with respect 
to such expenditures to each of such individuals, 
a credit under subsection (a) for the taxable year 
in which such calendar year ends in an amount 
which bears the same ratio to the amount deter-
mined under subparagraph (A) as the amount of 
such expenditures made by such individual dur-
ing such calendar year bears to the aggregate of 
such expenditures made by all of such individ-
uals during such calendar year. 
‘‘(2) TENANT-STOCKHOLDER
IN
COOPERATIVE 
HOUSING
CORPORATION.—In the case of an indi-
vidual who is a tenant-stockholder (as defined in sec-
tion 216) in a cooperative housing corporation (as de-
fined in such section), such individual shall be treated
1082 
HR 6 PAP 
as having made his tenant-stockholder’s proportionate 
share (as defined in section 216(b)(3)) of any expend-
itures of such corporation. 
‘‘(3) CONDOMINIUMS.— 
‘‘(A) IN GENERAL.—In the case of an indi-
vidual who is a member of a condominium man-
agement association with respect to a condo-
minium which the individual owns, such indi-
vidual shall be treated as having made the indi-
vidual’s proportionate share of any expenditures 
of such association. 
‘‘(B) CONDOMINIUM MANAGEMENT ASSOCIA-
TION.—For purposes of this paragraph, the term 
‘condominium management association’ means 
an organization which meets the requirements of 
paragraph (1) of section 528(c) (other than sub-
paragraph (E) thereof) with respect to a condo-
minium project substantially all of the units of 
which are used as residences. 
‘‘(4) ALLOCATION
IN
CERTAIN
CASES.—If less 
than 80 percent of the use of an item is for nonbusi-
ness purposes, only that portion of the expenditures 
for such item which is properly allocable to use for 
nonbusiness purposes shall be taken into account.
1083 
HR 6 PAP 
‘‘(5) WHEN
EXPENDITURE
MADE; AMOUNT
OF 
EXPENDITURE.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), an expenditure with respect 
to an item shall be treated as made when the 
original installation of the item is completed. 
‘‘(B) EXPENDITURES
PART
OF
BUILDING 
CONSTRUCTION.—In the case of an expenditure 
in connection with the construction or recon-
struction of a structure, such expenditure shall be 
treated as made when the original use of the con-
structed or reconstructed structure by the tax-
payer begins. 
‘‘(C) AMOUNT.—The amount of any expend-
iture shall be the cost thereof. 
‘‘(6) PROPERTY FINANCED BY SUBSIDIZED EN-
ERGY FINANCING.—For purposes of determining the 
amount of expenditures made by any individual with 
respect to any dwelling unit, there shall not be taken 
into account expenditures which are made from sub-
sidized energy financing (as defined in section 
48(a)(4)(C)). 
‘‘(f) BASIS ADJUSTMENTS.—For purposes of this sub-
title, if a credit is allowed under this section for any ex-
penditure with respect to any property, the increase in the
1084 
HR 6 PAP 
basis of such property which would (but for this subsection) 
result from such expenditure shall be reduced by the amount 
of the credit so allowed. 
‘‘(g) TERMINATION.—The credit allowed under this 
section shall not apply to property placed in service after 
December 31, 2009.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 23(c) is amended by striking ‘‘this 
section and section 1400C’’ and inserting ‘‘this sec-
tion, section 25D, and section 1400C’’. 
(2) Section 25(e)(1)(C) is amended by striking 
‘‘this section and sections 23 and 1400C’’ and insert-
ing ‘‘other than this section, section 23, section 25D, 
and section 1400C’’. 
(3) Section 1400C(d) is amended by striking 
‘‘this section’’ and inserting ‘‘this section and section 
25D’’. 
(4) Section 1016(a), as amended by this Act, is 
amended by striking ‘‘and’’ at the end of paragraph 
(34), by striking the period at the end of paragraph 
(35) and inserting ‘‘, and’’, and by adding at the end 
the following new paragraph: 
‘‘(36) to the extent provided in section 25D(f), in 
the case of amounts with respect to which a credit has 
been allowed under section 25D.’’.
1085 
HR 6 PAP 
(5) The table of sections for subpart A of part IV 
of subchapter A of chapter 1, as amended by this Act, 
is amended by inserting after the item relating to sec-
tion 25C the following new item: 
‘‘Sec. 25D. Residential energy efficient property.’’. 
(c) EFFECTIVE DATES.—The amendments made by 
this section shall apply to property placed in service after 
December 31, 2005, in taxable years ending after such date. 
SEC. 1528. CREDIT FOR BUSINESS INSTALLATION OF QUALI-
FIED FUEL CELLS AND STATIONARY MICRO-
TURBINE POWER PLANTS. 
(a) IN GENERAL.—Section 48(a)(3)(A) (defining en-
ergy property), as amended by this Act, is amended by 
striking ‘‘or’’ at the end of clause (ii), by adding ‘‘or’’ at 
the end of clause (iii), and by inserting after clause (iii) 
the following new clause: 
‘‘(iv) qualified fuel cell property or 
qualified microturbine property,’’. 
(b) QUALIFIED FUEL CELL PROPERTY; QUALIFIED 
MICROTURBINE PROPERTY.—Section 48 (relating to energy 
credit) is amended by adding at the end the following new 
subsection: 
‘‘(d) QUALIFIED FUEL CELL PROPERTY; QUALIFIED 
MICROTURBINE PROPERTY.—For purposes of this sub-
section— 
‘‘(1) QUALIFIED FUEL CELL PROPERTY.—
1086 
HR 6 PAP 
‘‘(A) IN GENERAL.—The term ‘qualified fuel 
cell property’ means a fuel cell power plant 
which— 
‘‘(i) has a nameplate capacity of at 
least 0.5 kilowatt of electricity using an 
electrochemical process, and 
‘‘(ii) has an electricity-only generation 
efficiency greater than 30 percent. 
‘‘(B) LIMITATION.—In the case of qualified 
fuel cell property placed in service during the 
taxable year, the credit otherwise determined 
under paragraph (1) for such year with respect 
to such property shall not exceed an amount 
equal to $500 for each 0.5 kilowatt of capacity 
of such property. 
‘‘(C) FUEL CELL POWER PLANT.—The term 
‘fuel cell power plant’ means an integrated sys-
tem comprised of a fuel cell stack assembly and 
associated balance of plant components which 
converts a fuel into electricity using electro-
chemical means. 
‘‘(D) SPECIAL RULE.—The first sentence of 
the matter in subsection (a)(3) which follows 
subparagraph (D) thereof shall not apply to 
qualified fuel cell property which is used pre-