The US Departments of Treasury and Energy announced that grants under the $3.4 billion Smart Grid Investment Grant program will not be subject to federal taxes.
Under the guidance released Wednesday, the Internal Revenue Service is providing a safe harbor under section 118(a) of the Internal Revenue Code for corporations receiving Recovery Act funding under the program.
With the determination, corporate utilities can now launch investments with a clear indication of the tax status for their projects.
The Department of Energy said it can now move forward quickly to finalize grant agreements over the coming weeks.
The $3.4 billion Smart Grid Investment grant program is the largest single energy grid modernization investment in U.S. history. Through this Recovery Act-funded program, one-hundred private companies, utilities, manufacturers, cities and other partners are receiving funding to implement a broad range of technologies that will spur the nation’s transition to a more efficient and reliable electric system.
Awardees have stated that the projects will create tens of thousands of smart grid jobs. Implementing the smart grid is expected to promote energy-saving choices for consumers, increase efficiency, and foster the growth of renewable energy sources like wind and solar.
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