On July 9, 2009, the U.S. Department of Treasury posted the procedures and application required to obtain the grants available in lieu of energy investment tax credits for specified energy property from the American Recovery and Reinvestment Act of 2009 at http://www.treas.gov/recovery/1603.shtml. Developers, investors, and equipment suppliers have been awaiting the release of this guidance because of the capital infusion it may provide to renewable energy projects.

Although the application form is now available, applications will not be accepted until August 1, 2009. Applications must be received by October 2, 2011. The application will be Web-based and applications will be accepted for projects placed in service in 2009 or 2010, or for projects that have commenced construction by December 31, 2010, and are placed in service before the expiration of the applicable Internal Revenue Code Section 48 or 45 tax credit. The guidance and application were released prior to the opening of the program so that eligible applicants could submit applications as soon as the application period opens. The guidance establishes the procedures for applying for payments and clarifies eligibility requirements under the program.

The grant program will operate similarly to the Section 48 Investment Tax Credit (ITC) and will provide funding to eligible persons to reimburse applicants for a portion of the cost of eligible property. One difference between the ITC and the grant program is that transfer of property to another eligible party will not trigger recapture under the grant program.

Applicants who received the grant will be ineligible for tax credits under Sections 48 and 45 of the Internal Revenue Code. There is no cap on the amount of grants to be issued by the Treasury, and the department, with technical support from the Department of Energy’s National Renewable Energy Laboratory, is committed to issuing funds within sixty (60) days of submission of a complete application, or the date the system is placed in service, whichever occurs later. 

 


 

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