Today the U.S. Department of Energy and the U.S. Department of the Treasury announced that it accepts applications for grants in lieu of investment tax credits (ITCs) or production tax credits (PTCs) not only for applicants in California but throughout the United States. With this announcement, the government is implementing section 1603 of the American Recovery and Investment Act of 2009 (ARRA) better known as the stimulus bill.
This provision allows applicants to claim a grant instead of ITCs and PTCs for certain renewable energy production facilities. With the direct payments ARRA aims at developing new jobs in the renewable energy sector as a means of helping the economy recover while advancing green energy development at the same time.
Renewable energy facilities that qualify for ITCs and PTCs are eligible for the ARRA grants. By allowing an immediate cash flow in form of a reimbursement of a portion of the renewable property expense instead of a tax credit, the ARRA acknowledges the lack of available financing for green energy projects. By accepting grants applicants forgo future tax credits which in the past covered parts of the cost for renewable energy projects.
The grant amount will generally be equal to the ITC or PTC amount for which the applicant is qualified for. Eligibility for the grants largely depends on the different types of renewable energy projects. The production facility must be placed in service in 2009 or 2010. If construction starts in 2009 or 2010, the facility must be placed into service no later than the end of 2012 (for wind), 2013 (for biomass, geothermal and other resources) and 2016 (for solar).
Please contact us if you have questions about any of these funding opportunities or if you would like assistance in applying for the ARRA grants.
