26 U.S.C. § 136 — Energy conservation subsidies provided by public utilities

(a) Exclusion. Gross income does not include the value of any subsidy a public utility provides, directly or indirectly, to a customer for buying or installing an energy conservation measure. (b) Denial of double benefit. No deduction or credit is allowed for any expenditure to the extent a subsidy for that expenditure was excluded under subsection (a). The adjusted basis of any property is reduced by the amount of any subsidy excluded under subsection (a) that was provided for that property. (c) Energy conservation measure. (1) In general: "Energy conservation measure" means any installation or modification mainly designed to reduce electricity or natural gas use, or to improve energy demand management, for a dwelling unit. (2) Other definitions: (A) "Dwelling unit" has the meaning given in section 280A(f)(1) — this section does not define it itself. (B) "Public utility" means a person engaged in selling electricity or natural gas to residential, commercial, or industrial customers for their own use. "Person" here includes the federal government, a state or local government or any of its political subdivisions, or any instrumentality of any of these. (d) Exception. This section does not apply to any payment to or from a qualified cogeneration facility or qualifying small power production facility made under section 210 of the Public Utility Regulatory Policy Act of 1978.