of Denver, Inc.
The American Reinvestment and Recovery Act has been implemented in part to expand and accelerate the development, deployment and use of solar energy in the United States. This act will provide funding needed to advance this industry's manufacturing, production and distribution so the technology can become competitive with conventional energy sources. It is creating a clean energy economy that will give our nation the push it needs to become energy independent.
The key provisions have been placed in categories to reflect how solar energy companies, their clients or the industry in general will benefit from and gain access to specific funding for solar projects.
Federal guidance pending: Agency guidance in the next 60 to 90 days; member alerts will be issued accordingly.
Tax code provision: Effective upon enactment unless noted otherwise; Solar Tax Manual will be updated.
Enhanced funding for existing State programs: Federal funds will be directed to States for distribution. State agencies will provide access to funds.
Agency specific appropriations: Funds directed to specific agencies for programs or projects that are most likely already in the pipeline.
Federal guidance pending: Agency guidance in the next 60 to 90 days; member alerts will be issued accordingly.
Renewable Energy Grants
Creates a new program through the Department of Treasury that provides grants equal to 30 percent of the cost of solar property placed in service during 2009 and 2010, in lieu of the section 48 investment tax credit. (Div. B, Sec. 1104, p. 38) Property that is not placed in service prior to December 31st, 2010 qualifies for the grant program as long as construction begins prior to December 31st, 2010 and is placed in service by January 1, 2017 . Applications must be filed by October 1, 2011 . (Div. B, Sec. 1603, p. 153) Key details such as what constitutes an application and “begins construction” will be defined in the near future by the Treasury Department.
Renewable Energy Loan Guarantee Program
Establishes a temporary DOE loan guarantee program for renewable energy projects, renewable energy manufacturing facilities and electric power transmission projects. Appropriates $6 billion to pay the credit subsidy costs, which should support $60 billion worth of loan guarantees. Eligible renewable projects are those that generate electricity or thermal energy and facilities that manufacture related components. Projects must commence construction by September 30, 2011. Davis-Bacon wage requirements (prevailing federal wage) apply to any project receiving a loan guarantee. (Div. A, p. 63 & p. 77)
Tax code provisions effective upon enactment:
Repeals Penalty for Subsidized Renewable Energy Financing
Allows businesses and individuals to qualify for the full amount of the solar tax credit, even if projects receive subsidized energy financing (e.g. below market loans, tax preferred bonds, state grants etc.). This amendment shall apply to periods after Dec. 31, 2008. (Div. B, Sec. 1103, p.36)
Removes Limits on Solar Water Heating
Section 25D provides a personal tax credit for the purchase of qualified solar water heating property that is used for a purpose other than heating swimming pools and hot tubs. The 30 percent ITC has a monetary cap of $2,000. This provision removes the $2,000 cap, providing a full 30 percent credit for qualified solar water heating property. The credit may be claimed against the alternative minimum tax. (Div. B, Sec. 1122(a), p. 46)
A tax deduction of up to $1.80 per square foot is available to owners or designers of new or existing commercial buildings that save at least 50% of the heating and cooling energy of a building that meet AS:HRAE Standard 90.1-2001. Partial deductions of up to $.60 per square foot can be taken for measures affecting any one of three building systems: the building envelope, lighting, or heating and cooling systems. These tax deductions are available for systems placed in service from January 1, 2006 through December 31, 2013.
For more information regarding legislation affecting solar energy, please click on the following link:
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