USA Federal Tax Credit

Expiration Date:

12/31/2011 (construction must begin by this date)

 

Download the Tax Credit reference - Treasury Guidance .pdf here:


Treasuryguidance.pdf



American Clean Energy and Security Act ( Reference Source )


http://www.ustreas.gov/recovery/1603.shtml


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


U.S. Department of Treasury - Renewable Energy Grants




State:

Federal

Incentive Type:

Federal Grant Program

Eligible Renewable/Other Technologies:

Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Fuel Cells, Geothermal Heat Pumps, Municipal Solid Waste, CHP/Cogeneration, Solar Hybrid Lighting, Hydrokinetic, Anaerobic Digestion, Tidal Energy, Wave Energy, Ocean Thermal, Microturbines

Applicable Sectors:

Commercial, Industrial, Agricultural

Amount:

30% of property that is part of a qualified facility, qualified fuel cell property, solar property, or qualified small wind property

10% of all other property

Maximum Incentive:

$1,500 per 0.5 kW for qualified fuel cell property

$200 per kW for qualified microturbine property

50 MW for CHP property, with limitations for large systems

Funding Source:

The American Recovery and Reinvestment Act (ARRA)

Start Date:

1/1/2009

Expiration Date:

12/31/2011 (construction must begin by this date)

Web Site:

http://www.treas.gov/recovery/1603.shtml

Authority 1:

H.R. 1: Div. B, Sec. 1104 & 1603 (The American Recovery and Reinvestment Act of 2009)

Date Enacted:

2/17/2009

Date Effective:

1/1/2009

Authority 2:

U.S. Department of Treasury: Grant Program Guidance

Date Enacted:

07/09/2009, subsequently amended

Summary:

Note: The American Recovery and Reinvestment Act of 2009 (H.R. 1) allows taxpayers eligible for the federal business energy investment tax credit (ITC) to take this credit or to receive a grant from the U.S. Treasury Department instead of taking the business ITC for new installations. The new law also allows taxpayers eligible for the renewable electricity production tax credit (PTC) to receive a grant from the U.S. Treasury Department instead of taking the PTC for new installations. (It does not allow taxpayers eligible for the residential renewable energy tax credit to receive a grant instead of taking this credit.) Taxpayers may not use more than one of these incentives. Tax credits allowed under the ITC with respect to progress expenditures on eligible energy property will be recaptured if the project receives a grant. The grant is not included in the gross income of the taxpayer.  

 

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.

  1. •Solar. 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.  

  2. •Fuel Cells. The grant is equal to 30% of the basis of the property for fuel cells. The grant for fuel cells is capped at $1,500 per 0.5 kilowatt (kW) in capacity. Eligible property includes fuel cells with a minimum capacity of 0.5 kW that have an electricity-only generation efficiency of 30% or higher.  
     

  3. •Small Wind Turbines. The grant is equal to 30% of the basis of the property for small wind turbines. Eligible small wind property includes wind turbines up to 100 kW in capacity.  
     

  4. •Qualified Facilities. The grant is equal to 30% of the basis of the property for qualified facilities that produce electricity. Qualified facilities include wind energy facilities, closed-loop biomass facilities, open-loop biomass facilities, geothermal energy facilities, landfill gas facilities, trash facilities, qualified hydropower facilities, and marine and hydrokinetic renewable energy facilities.  
     

  5. •Geothermal Heat Pumps. The grant is equal to 10% of the basis of the property for geothermal heat pumps.  
     

  6. •Microturbines. The grant is equal to 10% of the basis of the property for microturbines. The grant for microturbines is capped at $200 per kW of capacity. Eligible property includes microturbines up to two megawatts (MW) in capacity that have an electricity-only generation efficiency of 26% or higher.  
     

  7. •Combined Heat and Power (CHP). The grant is equal to 10% of the basis of the property for CHP. Eligible CHP property generally includes systems up to 50 MW in capacity that exceed 60% energy efficiency, subject to certain limitations and reductions for large systems. The efficiency requirement does not apply to CHP systems that use biomass for at least 90% of the system's energy source, but the grant may be reduced for less-efficient systems.

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, microturbines, CHP and geothermal heat pumps.



 

Contact:

 

Grant Information

U.S. Department of Treasury

1500 Pennsylvania Avenue, NW

Washington, DC 20220

Fax: (202) 622-6415

E-Mail: 1603Questions@do.treas.gov

Web Site: http://www.treas.gov/recovery/1603.shtml



Updated on December 28th, 2010:


Recovery Act

Home » Initiatives » Recovery Act » 1603 Program: Payments for Specified Energy Property in Lieu of Tax Credits

1603 Program: Payments for Specified Energy Property in Lieu of Tax Credits

 

THE SECTION 1603 PROGRAM HAS BEEN EXTENDED

 

Section 707 of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 extends, for one year, important program deadlines:

 

1.       Eligibility Deadlines:  To be eligible, a property must be placed in service in 2009, 2010, or 2011 or placed in service after 2011 but only if construction of the property began during 2009, 2010 or 2011.  The credit termination date (see Program Guidance pg.5) remains unchanged.

 

2.       Application Deadline: Applications must be submitted before October 1, 2012.    

 

 

Placed in Service Applications

  1. 1.Read the GUIDANCE , TERMS AND CONDITIONS , and SAMPLE APPLICATION.

  2. 2.If you do not already have one, request a DUNS number by calling 1-866-705-5711. This is needed to complete section 3A of the application.

  3. 3.Gather all of the documentation needed to complete section 6 of the application. Print the APPLICANT CHECKLIST to ensure you have all of the required documentation. For properties not yet placed in service, print the BEGUN CONSTRUCTION CHECKLIST to ensure you have all of the required documentation. 

  4. 4.Complete the on-line Application and sign the Terms and Conditions at https://treas1603.nrel.gov/.

  5. 5.Register with the Central Contractor Registration (CCR) at www.ccr.gov/startregistration.aspx. This registration must be completed before a payment can be made.

 

Frequently Asked Questions

Posted here are frequently asked questions about the 1603 program and their answers. 

 

Accountant’s Certification

For properties placed in service having a cost basis in excess of $500,000, applicants must submit an ACCOUNTANT’S CERTIFICATION with their application. 

 

Begun Construction Applications

1. Read the GUIDANCE  , TERMS AND CONDITIONS  , and SAMPLE BEGUN CONSTRUCTION APPLICATION.
2. Gather all documentation needed to complete Section 6 of the application.  Print the BEGUN CONSTRUCTION CHECKLIST  to ensure you have all of the required documentation.
3. Once the energy property has been placed in service, please follow the steps outlined above and supplement your application with required documentation.

REVISED GUIDANCE: Note:  Section IV C. (Beginning of Construction) of the Guidance has been revised.  No other changes to the Guidance have been made.   

Frequently Asked Questions Regarding the Beginning of Construction

For property that is not placed in service in 2009 or 2010, an eligibility requirement of the Section 1603 program is that construction on the property must begin in 2009 or 2010.  Posted here are frequently asked questions and answers about how to meet this requirement. 

Accountant’s Report for “Begun Construction” – 5% Safe Harbor

For projects relying on the 5% safe harbor with an estimated eligible cost basis of $1 million or more, applicants must submit a report from an independent accountant on the eligible costs of the specified energy property paid or incurred by December 31, 2010.  This report may be in the form of:

  1. •An Agreed-Upon Procedures (AUP) Report prepared by an independent accountant in accordance with AT Section 201, “Agreed-Upon Procedure Engagements,” of the AICPA; or

  2. •An Examination Report in accordance with AT Section 101, “Attest Engagements” (Statements on Standards for Attestation Engagements 10, as amended) of the AICPA. 

Instructions and example findings for the AUP Report are provided here

For the Examination Report we will accept any format that follows AT Section 101 and includes the required information here

 

Assignment of Payments to Financial Institutions

Applicants have the option of assigning their payment to a financial institution.  For information on assigning payments received under the 1603 program to a financial institution, click on the following links:

  1. •ASSIGNMENT INFORMATION

  2. •NOTICE OF ASSIGNMENT  submitted with application

Online Annual Report Form Available

All applicants that receive awards under the 1603 program are required to report certain information annually to the Treasury Department for a period of five years.  Reports are due annually, 30 days after the anniversary date of the date the property was placed in service.  The form used to submit this report is now available on-line and can be completed and submitted through the on-line application system at https://treas1603.nrel.gov.   Applicants will receive a reminder notification via email 30 days before the report is due. 

View a sample of the annual report. 


Questions

You may e-mail questions to 1603Questions@do.treas.gov.  Please note that the purpose of the 1603 mailbox is to answer questions regarding how to apply for the 1603 program.  This includes: how to submit an application, assign a payment, and prepare the independent accountant’s report.  We also answer general questions regarding applicant and property eligibility.  We cannot, however, answer questions that are more appropriately answered by tax accountants, lawyers, and the Internal Revenue Service.  This includes questions regarding what can and cannot be included in cost basis and whether or not certain business structures meet eligibility requirements.  Also, we cannot confirm eligibility for specific projects.

If you have already applied for the 1603 payment and have questions on your application or need technical support to up-load documents, change your password, or seek confirmation of additional up-loaded documents, please address those questions to: treas1603@nrel.gov.

List of Awards

Posted here is a list of awards.  This list is updated weekly.
Thank you for your interest in the 1603 program.