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
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.