US Treasury to Pay 30% of Project Costs for New Solar

In about 65 days, the US Treasury will begin to issue cash grants to owners of solar power systems of all sizes.  The grant is equal to 30% of the project’s cost. This includes households, solar developers, businesses, commercialbuildings, and utilities.  The grant is scalable.  On a $34,000 homeinstallation, the DOE will authorize a $10,200 payment.  On an $8million commercial installation, the DOE will authorize a $2.4 millionpayment.

istock_pvtrackerbannerIt’s worth repeating, the Department of Energy in conjunction with the Treasury will pay for 30% of your solar power project.There is no cap on project size. There is no cap on available funds. Treasury will make payments within 60 days of a completed application,or completion of a solar project, whichever is later.  The DOE willbegin accepting applications on August 1, 2009.

 For projects with a construction start date prior to 2009:

 Projects that began before January I, 1009, must be completed andplaced in service by December 31, 2010.  Applications for pre-2009projects must be submitted after the solar power system is in service,but before October 1, 2011.

 For projects started in 2009 and 2010:

 Projects starting construction in 2009 or 2010 must be completedand placed in service by December 31, 2016.  Applications must besubmitted after construction begins, but before October 1, 2011

 There are no plans to extend the program beyond 2010.

 If you are thinking about using the 30% cash grant to fund a new solar power system – from home rooftop to a multi-megawatt utility-scale facility – you must

  • start construction before the end of 2010,

  • complete the work before the end of 2016, and

  • submit an application by October 1, 2011.

Unfortunately, state, federal, or municipal governments are excluded.  So are non-profits and other tax exempt organizations. There are other exclusions and requirements.  The DOE recentlypublished Guidelines, Terms and Conditions, and an Application form.

There are risks.  By applying for the 30% cashgrant, you electing to accept the cash grant in place of a 30% taxcredit.  But like the tax credits, you must keep records and receiptsthat demonstrate the cost basis of your 30% grant.  The Treasury mayask to review your records at some future date.

Along with a complete and signed application you are required to

  • Sign the DOE “Terms and Conditions”,

  • Create a detailed cost breakdown, contracts, and receipts for all items contributing to your calculation of the 30% grant,

  • Projects over $500,000 require a cost report from an independent accountant,

  • Document the date the project was completed and placed in service.A “commissioning report” from the solar contractor or system designeris one way to confirm the completion date.

This is a partial list.  Always consult an attorney or CPAfamiliar with renewable energy law and tax subsidies before includingthe 30% cash grant in your finance calculation.

Resources:

Guidance Document http://www.treas.gov/recovery/docs/guidance.pdf

Terms and Conditions  http://www.treas.gov/recovery/docs/energy-terms-and-conditions.pdf

Application  http://www.treas.gov/recovery/docs/Application.pdf

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