In recent weeks, the ongoing implementation of the American Recovery and Reinvestment Act (Stimulus) has resulted in two new opportunities through the Department of Treasury as well as new funding for the Department of Energy's Loan Guarantee program. These new programs, in addition to ongoing funding opportunity announcements, present significant opportunities for renewable energy and biofuel production as well as transmission infrastructure improvements.
The following is a general overview of each of these programs and an update on their current status.
Grants in Lieu of Tax Credits
In creating the "Grants in Lieu of Tax Credits" program, lawmakers wanted to address the lack of investment capital available for renewable energy production facilities. On July 31, the Departments of Treasury and Energy announced that they were accepting applications for a new program, authorized through the Stimulus, which allows companies to receive direct payments instead of receiving tax credits through two popular programs for renewable energy production – the production tax credit and investment tax credit.
The Treasury grant program allows for payments for specified energy property placed in service during 2009 or 2010, or after 2010 if construction began on the property during 2009 or 2010. The value of the credit varies between 10 and 30 percent depending on the type of property installed. Entities would receive payment on the later of either 60 days from the date of the complete application or the date that the property is placed in service.
It is expected that this program will provide more than $3 billion in funds to nearly 5,000 renewable energy production facilities. The program is accepting online applications through October 2011 at https://treas1603.nrel.gov/.
Advanced Energy Manufacturing Credits
On August 13, the Department of Treasury announced the availability of $2.3 billion in tax credits for manufacturing facilities producing qualified advanced energy equipment, which includes:
- Technologies that create energy from renewable resources (sun, wind, geothermal and other renewable resources)
- Energy storage technologies (fuel cells, microturbines or other energy storage systems used in electric vehicles)
- Advanced transmission technologies that support renewable generation (including storage)
- Renewable fuel refining or blending technologies
- Energy conservation technologies (advanced lighting, smart grid)
- Plug-in electric vehicles and vehicle components (motors, generators)
- Property to capture and sequester carbon dioxide
- Other property designed to reduce greenhouse gas emissions
This new, temporary program will exist for two years, or until the cap has been reached. Companies can file applications for the first round of credit awards through October 16, 2009, and can expect to learn whether their applications are successful by January 15, 2010.
DOE Loan Guarantee Program
In addition to the new programs initiated through the Treasury Department, the DOE announced the sixth and seventh rounds of solicitations for its Loan Guarantee program on July 29. This recent announcement will support up to $30 billion in loan guarantees for renewable energy projects with $750 million to support loan guarantees for projects that improve the efficiency and reliability of the nation's transmission infrastructure and $500 million to support cutting edge biofuel projects. Originally authorized through the Energy Policy Act of 2005, the DOE's Loan Guarantee program supports the early adoption of new or significantly improved technologies that are not currently commercialized to the tune of $8.5 billion. A second Loan Guarantee program is designed for electric power transmission infrastructure investment projects and supports $48.6 billion worth of projects from a $6 billion appropriation. Applications for both of these programs consist of multiple parts, the first of which is due September 14 (for the renewable energy program) or September 16 (for the transmission infrastructure program).