If you are a Commercial business or non-profit in Connecticut please be aware that the US Treasury Grant will END Deecmber 31, 2010. Contact yoyur CPA, your lawyer and Sundoor Solar in Meriden as soon as you can.
The Recovery Act authorized Treasury to make direct payments to companies that create and place in service renewable energy facilities beginning January 1, 2009.
Funded through the American Recovery and Reinvestment Act (Recovery Act), the program will provide direct payments in lieu of tax credits in support of an estimated 5,000 bio-mass, solar, wind, and other types of renewable energy production facilities.
Solar stimulus is ready, set and … ending soon. The Treasury guidelines allow solar developers to prepare formal applications that will be accepted at a later date
To expedite implementation of the program, Treasury and Energy have made available the terms and conditions, guidance, and a sample application so that companies can prepare successful applications in advance of the launch of the web based application in the coming weeks - yet another tool designed to facilitate the timely flow of program funds to eligible businesses.
The U.S. Treasury Department ("Treasury") released guidance related to the Treasury Grant program enacted under Section 1603 of the American Recovery and Reinvestment Tax Act of 2009. Generally, Section 1603 provides a 30% cash grant in lieu of investment tax credits for solar facilities that are (a) placed in service in 2009 or 2010 (regardless of when construction began), or (b) placed in service after 2010 but before January 1, 2017, but only if the construction of such property began during 2009 or 2010. The Treasury Grant is only available for property that is used in a trade or business or held for the production of income. Accordingly, non‐business energy property and residential energy efficient property eligible for tax credits under Section 25C and 25D of the Internal Revenue Code (the "Code") do not qualify for a Treasury Grant.
This document is only a summary of certain aspects of the Treasury Grant program guidance
For 2009 and 2010 projects, solar projects that are eligible for depreciation or amortization (typically those owned by corporate tax filers) can receive a 30% upfront cash grant in lieu of the 30% tax credit. The 30% solar tax credit for individual filers (i.e. residential systems) remains unchanged. The Treasury Department will administer the solar grant program and is required to pay out each solar grant within 60 days of the receipt of each application [Section 1603]. The solar grant is not subject to federal taxes [Section 1104]. There's no word yet on whether the solar grant will be assignable. The same eligibility of the investment solar tax credit applies; in particular, this means that governmental and non-tax paying entities aren't eligible. Almost all solar electric PV applications should be eligible, with the lone exception being swimming pool heating.
Projects that benefit from subsidized financing will not have their federal grant reduced [Section 1103]. This will put tax-backed municipal loan programs on safer ground.
30% Solar Tax Credit for Residential Solar Electric Systems
A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the United States and used as a residence by the taxpayer. Expenditures include labor costs for onsite preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. The maximum allowable credit, equipment requirements and other details vary by technology, as outlined below under solar electric property.
The American Recovery and Reinvestment Act of 2009 (H.R. 1), enacted in February 2009, created a renewable energy grant program that is administered by the U.S. Department of Treasury. This cash grant may be taken in lieu of the federal business energy investment tax credit (ITC). In July 2009 the Department of Treasury issued documents detailing guidelines for the grants, terms and conditions and a sample application. There is an online application process, and applications are currently being accepted. See the US Department of Treasury program web site for more information, including answers to frequently asked questions. The Department of Treasury has also filed a sample form that recipients of the grant must fill out each year to avoid recapture.
Grants are available to eligible property* placed in service in 2009 or 2010, or placed in service by the specified credit termination date,* if construction began in 2009 or 2010.
The guidelines include a "safe harbor" provision that sets the beginning of construction at the point where the applicant has incurred or paid at least 5% of the total cost of the property, excluding land and certain preliminary planning activities. Generally, construction begins when "physical work of a significant nature" begins. Below is a list of important program details as they apply to each different eligible technology.
The grant is equal to 30% of the basis of the property for solar energy. Eligible solar-energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. Passive solar systems and solar pool-heating systems are not eligible. Hybrid solar-lighting systems, which use solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight, are eligible.
It is important to note that only tax-paying entities are eligible for this grant. Federal, state and local government bodies, non-profits, qualified energy tax credit bond lenders, and cooperative electric companies are not eligible to receive this grant. Partnerships or pass-thru entities for the organizations described above are also not eligible to receive this grant, except in cases where the ineligible party only owns an indirect interest in the applicant through a taxable C corporation. Grant applications must be submitted by October 1, 2011. The U.S. Treasury Department will make payment of the grant within 60 days of the grant application date or the date the property is placed in service, whichever is later.
* Definitions of eligible property types and renewable technologies can be found in the U.S. Code, Title 26, § 45 and § 48.
** Credit termination date of January 1, 2013, for wind; January 1, 2014, for closed-loop biomass, open-loop biomass, landfill gas, trash, qualified
hydropower, marine and hydrokinetic; January 1, 2017, for fuel cells, small wind, solar, geothermal, micro turbines, CHP and geothermal heat pumps. Contact: Grant Information
U.S. Department of Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220
Web Site: http://www.treas.gov/recovery/1603.shtml
For a review of your clients electric usage, your business solar orientation, or the financial benefits of solar electricity and how the grant can put hundreds of thousands of dollars in your pocket - please contact Sundoor Solar at 203.630.7077 in Meriden CT or visit them online at sundoorsolar.com
Open the door to the Sun!
Paul Schmitz, Operations Manager
125 Research Parkway
Meriden CT 06450