Renewable Energy Update

Treasury Department Releases Guidance and Applications for Renewable Energy Grants Under Recovery Act

The United States Treasury Department today issued guidance and posted the application forms that will govern the renewable energy grant program authorized by Section 1603 of the American Recovery and Reinvestment Act (“ARRA” or “Recovery Act”). The Recovery Act added a federal non-competitive grant program in lieu of the energy investment tax credit and the production tax credit. The amount of the grant ranges from 10% to 30% of a taxpayer's basis for qualifying renewable energy projects.

To qualify for a grant, eligible property must be placed in service in 2009 or 2010; or, if construction began on the qualifying facility during 2009 or 2010, before January 1, 2013 (for wind facilities), before January 1, 2014 (for closed- and open-loop biomass, certain geothermal, solar, landfill gas, waste-to-energy, hydropower and marine energy renewable facilities), or before January 1, 2017 (for other qualified facilities) or the date the property is placed in service.

Although there is no cap on the total amount of grants that can be issued under Section 1603, the Treasury Department today estimated that at least $3 billion of grants will be awarded on a non-competitive basis. Grant applications may be submitted beginning August 1, 2009; however, applications will not be reviewed by the Department until the project is placed in service and begins to produce electricity.

More details on today’s announcement can be found at the following sites:

www.treas.gov/recovery

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

www.treas.gov/recovery/docs/energy-terms-and-conditions.pdf

www.treas.gov/recovery/docs/application.pdf