The U.S. Department of Treasury on Thursday released some guidelines for an eagerly awaited cash grant program that aims to ease the financing dry spell experienced by many renewable energy project developers.
The guidelines, including a sample application, would help solar, wind, geothermal, ocean power and other renewable energy companies access more than $3 billion set aside by the American Recovery and Reinvestment Act that was passed in February this year.
But the guidelines do not provide the full information about how to apply for the grant, and the Treasury Department isn't accepting applications at this time. Some of the documents and the sample application available now are meant to help companies prepare for their submissions. The department will be open for applications "in the coming weeks," when it sets up a website to receive applications. Update: A Treasury official said it could start taking applications around Aug. 1.
The Treasury Department at first indicated that it would release the guidelines and application last month. That didn't happen and caused some worries among project developers who see this pot of money, along with a loan guarantee program being administered by the U.S. Department to Energy, as critical resources for carrying out their first big project (see Solar Companies Fear Delays as Feds Work Slow Magic).
The DOE has yet to release the guidelines for the loan guarantee program.
The grant program allows project owners to opt for the cash equivalent of the 30 percent investment tax credit that has existed for years. Many of the solar farms being developed in California and southwestern states now are over 100 megawatt in size and cost hundreds of millions of dollars for each project.
The tax credit has been a good incentive. In 2006, the government provided about $550 million in tax credits to 450 companies, the Treasury Department said.
But solar and other renewable energy companies lobbied for a more immediate financial incentive when they began to have difficulties lining up loans and other financing from banks and investors for building power plants in the last 10 months.
Power projects that are place after Jan. 1 this year would be eligible for the grant, the Treasury Department said. The Treasury would issue the grant within 60 days of receiving each application. There is no cap for each application.
In general, those who could otherwise apply to get the 30 percent tax credit on their businesses' tax forms could qualify. So private project owners and investors could get the grant, said John Marciano, an associate at the law firm Chadbourne & Parke in Washington, D.C. at a recent solar conference.
The grant program is meant to help projects that are up and running during 2009 and 2010. The government would consider projects that aren't finished by the end of 2010. The guidelines spell out some more deadlines.
But given the delay on starting the grant program, the Solar Energy Industries Association is now lobbying for a one-year extension of the program.
Join experts and influencers at Greentech Media's Growth Opportunities in the New PV Market: Projects, Finance and Policy in San Francisco on July 13.