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August 08, 2009
Treasury Department Calls for Applications for Renewable Energy Grants
    by Robert Kropp

Under the American Recovery and Reinvestment Act, at least $3 billion is available for construction of renewable energy facilities.


On July 31, the US Department of the Treasury and the US Department of Energy announced that they are now accepting applications to receive funding of at least $3 billion for the creation and placement into service of approximately 5,000 renewable energy facilities. The funding was made available through the American Recovery and Reinvestment Act (ARRA) of 2009.

According to a Program Guidance document issued by the Treasury Department earlier in July, the "program will temporarily fill the gap created by the diminished investor demand for tax credits." Since the beginning of the economic crisis in 2008, the number of renewable energy installations has decreased, as companies have encountered difficulty in locating funding for them.

Formerly, companies engaged in renewable energy technologies could apply for tax credits to cover a portion of the cost of the project. ARRA has authorized direct payments in lieu of tax credits to companies that create and place in service renewable energy facilities beginning January 1, 2009.

According to the guidance document, "Qualified property must be originally placed in service between January 1, 2009, and December 31, 2010, (regardless of when construction begins) or placed in service after 2010 and before the credit termination date if construction of the property begins between January 1, 2009, and December 31, 2010."

In some cases, qualified properties includes expansions of existing properties.

The percentage of eligible cost for projects that qualify for payment ranges from 10% to 30%. The credit termination date ranges from January 1, 2013 for large wind projects to January 1, 2017 for solar and other projects.

The Treasury Department directs applicants to its Application Submission Page for instructions relating to the program.

 

 
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