$3 Billion Available for Renewable Energy Projects under ARRA
July 14, 2009
On July 9, 2009, Treasury Secretary Tim Geithner announced the availability of $3 Billion to fund grants for renewable energy projects under the American Recovery and Reinvestment Act (“ARRA”). The grant is in place of tax credits under Internal Revenue Code sections 48 and 45. Although the Treasury is not yet accepting grant applications, the information provided by Secretary Geithner included eligibility requirements that allow businesses to evaluate their opportunities to receive grant funding and begin preparing to submit their applications.
According to its Program Guidance, Treasury anticipates the grant program “will temporarily fill the gap created by the diminished investor demand for tax credits.” By stepping in to fill this gap, Treasury hopes to further the short-term goal of creating and retaining jobs, and the long term goal of expanding use of clean and renewable energy while decreasing our dependence on non-renewable energy. This program complements the existing tax credits extended by ARRA to homeowners for similar projects.
To be eligible, the renewable energy project must be placed in service during, or under construction beginning in, 2009 or 2010. Grants will range from 10% to 30% of the project’s tax basis.
These projects, as defined by the Internal Revenue Code, are eligible for grants:
Grantees will have minimal reporting obligations, including the name of the applicant and the project’s current owner, the name and location of the project, the number of jobs retained, the installed nameplate capacity and the annual production. Also, the applicant must certify, for a period of five years from the date the project was placed in service, that the project has not been disposed of to a disqualified person and that the project continues to qualify for the grant program. If, during the five year period, the project is disposed of to a disqualified person, or if the project no longer qualifies for the grant program, then the grantee will have to refund a declining percentage of the grant.
Feel free to contact Todd Bradford or Jonathan Bryant in our Indianapolis office, Heidi Trimarco in our Cincinnati office, or any attorney at Taft, if you have a renewable energy project that may qualify for a grant.
According to its Program Guidance, Treasury anticipates the grant program “will temporarily fill the gap created by the diminished investor demand for tax credits.” By stepping in to fill this gap, Treasury hopes to further the short-term goal of creating and retaining jobs, and the long term goal of expanding use of clean and renewable energy while decreasing our dependence on non-renewable energy. This program complements the existing tax credits extended by ARRA to homeowners for similar projects.
To be eligible, the renewable energy project must be placed in service during, or under construction beginning in, 2009 or 2010. Grants will range from 10% to 30% of the project’s tax basis.
These projects, as defined by the Internal Revenue Code, are eligible for grants:
- Large and Small Wind;
- Solar;
- Fuel Cells;
- Closed- and Open-Loop Biomass Facilities;
- Geothermal;
- Trash and Landfill Gas Facilities;
- Qualified Hydropower Facilities;
- Marine and Hydrokinetic;
- Microturbines; and
- Combined Heat & Power.
Grantees will have minimal reporting obligations, including the name of the applicant and the project’s current owner, the name and location of the project, the number of jobs retained, the installed nameplate capacity and the annual production. Also, the applicant must certify, for a period of five years from the date the project was placed in service, that the project has not been disposed of to a disqualified person and that the project continues to qualify for the grant program. If, during the five year period, the project is disposed of to a disqualified person, or if the project no longer qualifies for the grant program, then the grantee will have to refund a declining percentage of the grant.
Feel free to contact Todd Bradford or Jonathan Bryant in our Indianapolis office, Heidi Trimarco in our Cincinnati office, or any attorney at Taft, if you have a renewable energy project that may qualify for a grant.
