Treasury Announces Grant Program forRenewable Energy Projects 
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Nearly five months after the enactment of the American Recovery and Reinvestment Act, the U.S. Department of the Treasury and the U.S. Department of Energy (DOE) today announced a multi-billion dollar program for the development of renewable energy projects. The Act extended and modified tax credits for renewable energy projects in a manner intended to make such projects more financially feasible during the current economic downturn. The Act authorized the Treasury to make direct payments to companies that create and place in service renewable energy facilities beginning January 1, 2009.
Under the new program, businesses may elect to forgo renewable energy tax credits in return for an immediate reimbursement of a portion of qualified expenses. The cash in lieu of credit program is intended to provide immediate stimulus in local economies, and guidance is now available for businesses to elect direct payments in lieu of tax credits in support of renewable energy facilities. According to their press release, the Treasury and DOE estimate that the cash in lieu of credit program will support 5,000 bio-mass, solar, wind, and other types of renewable energy production facilities. While applications are not yet being accepted, businesses interested in applying for the new program should start preparing now to seek the cash grants.
Businesses considering the election of cash in lieu of credits should carefully consider not only the requirements of the program, but also the tax consequences of the election as it may impact the overall economics of the project. If you have any questions, please contact Paul Jones, partner in the Tax Practice Group and member of the Firm's Green Industries Initiative.
Under the new program, businesses may elect to forgo renewable energy tax credits in return for an immediate reimbursement of a portion of qualified expenses. The cash in lieu of credit program is intended to provide immediate stimulus in local economies, and guidance is now available for businesses to elect direct payments in lieu of tax credits in support of renewable energy facilities. According to their press release, the Treasury and DOE estimate that the cash in lieu of credit program will support 5,000 bio-mass, solar, wind, and other types of renewable energy production facilities. While applications are not yet being accepted, businesses interested in applying for the new program should start preparing now to seek the cash grants.
Businesses considering the election of cash in lieu of credits should carefully consider not only the requirements of the program, but also the tax consequences of the election as it may impact the overall economics of the project. If you have any questions, please contact Paul Jones, partner in the Tax Practice Group and member of the Firm's Green Industries Initiative.
