Solar Tax Grant Forms Available Here

Those contemplating solar power for home or business and want to take the 30% tax credit as a grant can now apply. The grant is part of the American Recovery and Reinvestment Act of 2009 passed in February. Solar, wind, geothermal, hydropower and (unfortunately) nuclear are eligible projects. The program is funded with $85 billion but this could go quickly if a few nuclear projects take the grant. The simple three-page grant application becomes available tomorrow from the Treasury Department but the grant application, grant program terms and grant guidance document--all PDFs--are available here. If interested, request the three documents by emailing: dbrands@cox.net.

Special thanks to my solar colleague in Phoenix, Dan Hoskin, for getting these docs to Solar Advice for Free.

Near Signing, Stimulus Burns Bright for Solar

(Much of the information in this post is reported in "US House & Senate agree to US$787B package; good news for solar industry" by Patricia Johnson in PV-tech.org. Feb. 16, 2009)

When President Obama signs the so-called American Recovery and Reinvestment Act tomorrow in Denver, he will be signing into law the single most expansive economic rescue package since the Great Depression, even after cuts to the legislation. The final $787 billion bill, being signed within the his first 30 days in office, likely could be the biggest piece of legislation President Obama will ever sign. Indeed, it would be a heady moment for any president.

Better yet, the final act gives many reasons for the solar power industry to be pleased.

The bill includes about $6 billion in loan guarantees for renewable energy project, mostly solar. PV industry estimates some 67,000 jobs will be created in 2009 and 119,000 more over the next two years.

Many solar/wind advocates, including this writer, have groused for years about the federal government's favoring coal, natural gas and nuclear power electricity producers. Coal has been favored because it simply produces power the cheapest; natural gas because it's relatively plentiful and burns cleaner; and nuclear power because it's supposedly cheap and non polluting. In reality, coal-fired power plants are the single-most polluting source of greenhouse gas emissions; natural gas, although cleaner burning, is still the bastard gas of fossil fuels and emits GHGs when burned; and nuclear power has never been "too cheap to meter" as it was once touted and nuclear waste is still a chronic problem. But PV panel manufacturers have been forced to make it on their own in the uneven power market.

Until now.

The stimulus package creates a new 30% tax credit for facilities and equipment used to manufacture renewable energy-generating components, such as solar panels. Finally, the actual makers--not just the end-users--get an break.

It gets better. Taxpayers purchasing PV systems can redeem the 30% tax credit as a cash grant if they do not have a sufficient tax liability to offset. Furthermore, the tax penalty for subsidized energy financing will be repealed.

Finally, the stimulus commits $11 billion to new technologies contributing to a more efficient energy grid, the "smart grid"; $6.3 billion for energy efficiency and conservation grants; and $2.5 billion to fund energy efficiency and renewable energy research.

Stimulus: 30% Solar Tax Credit or Cash Grant?

The U.S. Senate's version of the stimulus package includes a new grant plan enabling renewable energy producers to take a 30% cash grant from the U.S. Treasury in lieu of the 30% investment tax credit currently in effect. The proposal, presented by Sen. Jeff Bingaman (D-NM), aims at addressing the precarious position of the tax equity market. Expectations for a refundable ITC had been very low in the Senate's version but now, as both the Senate and House stimulus bills include this investment option, the likelihood of inclusion in the final bill looks good.

As a result of the current economic situation, the availability of tax-equity investors for solar and other renewable energy projects has dropped considerably. Some three-quarters of companies involved in tax-equity investing (power purchase agreement investor groups) are no longer contracting such deals.

"The squeeze in the tax equity market threatens to severely slow down the construction of new facilities for renewables. I strongly support the Senate package which would enable firms to carry back their tax credits for five years. But I also would support doing more, as long as we protect the American taxpayer," said Sen. Bingaman who chairs the Energy & Natural Resources Committee and is a senior member of the Finance Committee.

"This grant proposal threads the needle by offering an opportunity for developers to monetize the production and investment tax credits but does so in a commonsense way. Of course, no one is forced to accept a grant under the proposal; any project developer can still choose to get the traditional PTC or ITC route," said Bingaman.

The senator developed his approach after consultation with numerous renewable energy developers and financiers. Industry members have praised it as a workable solution. Utility-scale solar developers can also benefit from Bingaman's version because their longer build-out schedules, such projects were basically left out of the House provision.

The Obama Administration is still hoping for Congress to be finished with the stimulus bill by mid-month, a daunting task for the next ten days.

(This story is a summary derived from articles in the Feb. 4, 2009 Futures and Commodity Market News and the PV Tech Newsletter.)