Skip to content

General education, not advice for your situation.

Carry Forward Learning Start here Intern0 XP

Internal Revenue Code · 26 U.S.C.

§ 136. Energy conservation subsidies provided by public utilities

In force Text current through Public Law 119-121 (October 9, 2026) release point 119-121

Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).

Cite as 26 U.S.C. § 136

At a glance

Read from the text, the source credit and the official notes. Not part of the law.

Status
In force
Added
October 24, 1992 by Pub. L. 102–486
Last amended
August 20, 1996 by Pub. L. 104–188
Amendments
1 dated changes in the source credit
Length
4 subsections · 298 words · about 1 min to read
Defines
4 terms
Cross-references
cites 1; cited by 0 Code sections and 0 other regulations
(a) Exclusion

Gross income shall not include the value of any subsidy provided (directly or indirectly) by a public utility to a customer for the purchase or installation of any energy conservation measure.

(b) Denial of double benefit

Notwithstanding any other provision of this subtitle, no deduction or credit shall be allowed for, or by reason of, any expenditure to the extent of the amount excluded under subsection (a) for any subsidy which was provided with respect to such expenditure. The adjusted basis of any property shall be reduced by the amount excluded under subsection (a) which was provided with respect to such property.

(c) Energy conservation measure
(1) In general

For purposes of this section, the term “energy conservation measure” means any installation or modification primarily designed to reduce consumption of electricity or natural gas or to improve the management of energy demand with respect to a dwelling unit.

(2) Other definitions For purposes of this subsection—
(A) Dwelling unit

The term “dwelling unit” has the meaning given such term by section 280A(f)(1).

(B) Public utility

The term “public utility” means a person engaged in the sale of electricity or natural gas to residential, commercial, or industrial customers for use by such customers. For purposes of the preceding sentence, the term “person” includes the Federal Government, a State or local government or any political subdivision thereof, or any instrumentality of any of the foregoing.

(d) Exception

This section shall not apply to any payment to or from a qualified cogeneration facility or qualifying small power production facility pursuant to section 210 of the Public Utility Regulatory Policy Act of 1978.

(Added Pub. L. 102–486, title XIX, § 1912(a), Oct. 24, 1992, 106 Stat. 3014; amended Pub. L. 104–188, title I, § 1617(a), (b), Aug. 20, 1996, 110 Stat. 1858.)

Terms defined here

Where the text says “the term … means”. Select a term to jump to its definition.

Cross-references

Computed from the citations in the text of Title 26 and 26 CFR.

This section cites 1 other section

Amendment history

From the source credit and the official notes, newest first.

  1. Amended by Pub. L. 104–188Parts changed in 1996: (a) (c)(1) (c)(2)
  2. Added by Pub. L. 102–486

Where it sits in the Code

  1. Subtitle A Income Taxes
  2. Chapter 1 NORMAL TAXES AND SURTAXES
  3. Subchapter B Computation of Taxable Income
  4. Part III ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME

Nearby sections

Official notes

Show the Law Revision Counsel's notes (amendments, effective dates)

Editorial Notes

References in Text

Section 210 of the Public Utility Regulatory Policy Act of 1978, referred to in subsec. (d), probably means section 210 of the Public Utility Regulatory Policies Act of 1978, Pub. L. 95–617, which is classified to section 824a–3 of Title 16, Conservation.

Prior Provisions

A prior section 136 was renumbered section 140 of this title.

Amendments

1996—Subsec. (a). Pub. L. 104–188, § 1617(b)(1), reenacted heading without change and amended text generally, substituting present provisions for former provisions which consisted of general exclusion in par. (1) and limitation for exclusion on nonresidential property in par. (2).

Subsec. (c)(1). Pub. L. 104–188, § 1617(a), substituted “energy demand with respect to a dwelling unit.” for “energy demand—

“(A) with respect to a dwelling unit, and

“(B) on or after January 1, 1995, with respect to property other than dwelling units.

The purchase and installation of specially defined energy property shall be treated as an energy conservation measure described in subparagraph (B).”

Subsec. (c)(2). Pub. L. 104–188, § 1617(b)(2), struck out “and special rules” after “definitions” in heading, redesignated subpars. (B) and (C) as (A) and (B), respectively, and struck out former subpar. (A) which related to “specially defined energy property”.

Statutory Notes and Related Subsidiaries

Effective Date of 1996 Amendment

Pub. L. 104–188, title I, § 1617(c), Aug. 20, 1996, 110 Stat. 1858, provided that: “The amendments made by this section [amending this section] shall apply to amounts received after December 31, 1996, unless received pursuant to a written binding contract in effect on September 13, 1995, and at all times thereafter.”

Effective Date

Pub. L. 102–486, title XIX, § 1912(c), Oct. 24, 1992, 106 Stat. 3016, provided that: “The amendments made by this section [enacting this section and renumbering former section 136 as 137] shall apply to amounts received after December 31, 1992.”