The U.S. Department of Energy and the U.S. Department of the Treasury on Friday began accepting applications for a program that will make direct payments in lieu of tax credits to companies that create and place in service renewable energy facilities and create renewable energy jobs.
The two Departments estimate distributing at least $3 billion in financial support to approximately 5,000 bio-mass, solar, wind, and other types of renewable energy production facilities. The funding for this effort is made available through the American Recovery and Reinvestment Act.
"This program will play a major role in encouraging private sector capital to invest in clean energy development, creating new jobs that can’t be outsourced," Energy Secretary Steven Chu said. " It is an investment that will continue to help our economy grow and ensure advancement in clean and renewable energy development."
The Recovery Act authorized Treasury to make direct payments to companies that create and place in service renewable energy facilities beginning January 1, 2009. Previously, these companies could file for a tax credit to cover a portion of the renewable energy project’s cost; under the new program, applicants would agree to forgo future tax credits in favor of an immediate reimbursement of a portion of the property expense. The Energy Department will assist Treasury in implementing this program by reviewing the technical merits of the applications.
In previous years, the tax credit has been widely used. The rate of new renewable energy installations has fallen since the economic downturn began, as projects had a more difficult time obtaining financing. The Departments of the Treasury and Energy said they expect a fast acceleration of businesses applying for the direct cash payment in lieu of the tax credit.
Earlier this year, Energy and Treasury held a stakeholder outreach conference call to assist companies in applying for the program. They also made available in advance the program’s terms and conditions, guidance, and a sample application so that companies could prepare applications in advance of the launch of the web-based application, aimed at expediting the distribution of program funds to eligible businesses.
Companies interested in applying for the program can visit the U.S. Department of the Treasury’s Application Submission page at the link below.
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