Scientific Energy Research Consortium

Tax Equity Investments into Qualified Energy Research

Our Mission

At the Scientific Energy Research Consortium, our mission is to advance sustainable energy solutions through innovative research and collaboration. We strive to provide cutting-edge insights that drive the science and technology of energy efficiency.

An Energy Research Consortium is a nonprofit corporation engaged in energy related research. The purpose on an Energy Research Consortium is to engage in research and experimentation that leads to the development of new, improved or more energy efficient technology. Energy research includes, but is not limited to, the development of new or improved sources of energy, energy transmission, energy storage, energy conversion, energy transfer, energetic chemical reactions or processes along with the development of new or improved energy related materials, such as graphene, to support each new or improved process or activity.

Unlike other nonprofit entities, the Internal Revenue Code provides significant tax incentives in exchange for an investment into an Energy Research Consortium, “ERC”. An ERC is a hybrid type of nonprofit; a taxpayer (Investor) is able to make an “investment” into an ERC and in exchange receive a 20% tax credit and an expense deduction for 80% of the cost of the energy research project. The tax credit is a dollar-for-dollar offset against federal income tax and the expense deduction will reduce taxable income. The intellectual property developed by the ERC is licensed back to the Investor.

Scientific Energy Research Consortium is a qualified 501(c)(3) nonprofit ERC that is engaged in research and experimentation with a current interest in hydrogen production through electrolysis and the improvement in the design, engineering and manufacture of hydrogen fuel cells used for electric power generation.

Federal Tax Incentives

At Scientific Energy Research Consortium, our mission is to provide innovative solutions for the science and technology industry. We strive to make the world a better place through cutting-edge research and development.

26 USC 41 Research Tax Credit

An investment into an ERC provides an Investor with a 20% tax credit that may be used to offset income tax from other sources of income. The section 41 provides authority for the tax credit:

Section 41(a)(3): “The research credit shall be an amount equal to… 20% of the amount paid or incurred by the taxpayer in carrying on any trade or business of the taxpayer…including contributions to an energy research consortium for energy research.”

Section 41(f)(6): “The term “energy research consortium” means any organization which is described in section 501(c)(3) and is exempt from tax under section 501(a) and is organized and operated primarily to conduct energy research, or organized and operated primarily to conduct energy research in the public interest.”

Section 41(d)(1): “the term “qualified research” means research with respect to which expenditures are treated as domestic research or experimental expenditures under section 174A, which is undertaken for the purpose of discovering information which is technological in nature and the application of which is intended to be useful in the development of a new or improved business component of the taxpayer, and substantially (80%) all of the activities of which constitute elements of a process of experimentation for a purpose described in (section 41(d)(3)).”

Section 41(d)(3): “research shall be treated as conducted for a purpose described in this paragraph if it relates to a new or improved function, (improved) performance, or reliability or quality.”

26 USC 174A Research Expense Deduction

An Investor that makes an investment into an ERC may take a deduction equal to the total amount paid or incurred by the taxpayer with respect to the cost of the ERC research project. The expense deduction allows the taxpayer to take a deduction against other taxable income which lowers the taxpayer’s income tax.

Section 174A(a): “There shall be allowed as a deduction any domestic research or experimental expenditures which are paid or incurred by the taxpayer during the taxable year.”

CFR Section 1.174-2(a)(1): “the term research or experimental expenditures means expenditures incurred in connection with the taxpayers trade or business which represent research and development costs in the experimental or laboratory sense.”

Scientific Energy Research Consortium