Manufacturers, installers and advocates of renewable energy facilities received a gift from Congress under the Tax Relief Act. In particular, Section 707 provides for a one-year extension of the grant in lieu of the tax credit allowed for certain expenditures relating to energy property specified under Section 1603 of the American Recovery and Reinvestment Act of 2009 (“ARRA”). This grant in lieu incentive authorizes taxpayers to make application for a cash grant equal to 30% of the cost of certain “specified energy property,” including “qualified facilities,” “qualified fuel cell property,” “solar property” and “qualified small wind energy property,” as such terms are defined in Section 48 of the Internal Revenue Code (26 U.S.C. § 48) or a grant of 10% in the case of all other specified energy property.
As a result of the Tax Relief Act, this grant in lieu program will now be available to interested taxpayers who place their specified energy property in service during 2011, or even after 2011 provided that the taxpayer shall place such property in service before the credit termination date (which, in the case of specified energy property described in Section 48 of the IRC, is January 1, 2017), and shall have started construction during 2009, 2010 or 2011. Applicants will also have additional time to submit grant applications, being that the Tax Relief Act extended the applicable deadline by one year from October 1, 2011, to October 1, 2012. After that date, the Secretary of the U.S. Department of the Treasury shall not process or consider any grant application for payment.