Department of Treasury Releases Cash Grant Guidelines

Washington, D.C., July 9, 2009 - The United States Treasury Department posted guidance documents for the cash grant program created in section 1603 of the American Recovery and Reinvestment Act of 2009 (ARRA) including:

  • Program guidance document
  • Terms and conditions
  • Sample application

It is expected that the Section 1603 program will temporarily fill the gap created by the diminished investor demand for tax credits. In this way, the near term goal of creating and retaining jobs is achieved, as well as the long-term benefit of expanding the use of clean and renewable energy and decreasing our dependency on non-renewable energy sources. Details are available on the Treasury web site:

www.ustreas.gov/recovery/1603.shtml 

Interested applicants please note:

The election to receive the cash grant is an irrevocable election that prohibits an applicant from also receiving the Production Tax Credit (PTC) or the Investment Tax Credit (ITC). For more guidance on electing the ITC or cash grant in lieu of the PTC, see the IRS Notice 2009-52:

www.irs.gov/pub/irs-drop/n-09-52.pdf

Identifying whether the PTC, ITC or cash grant will be most financially beneficial to a particular project depends on a number of factors and will require a thorough financial analysis of a project. Lawrence Berkeley National Laboratory (LBNL) and the National Renewable Energy Laboratory (NREL) issued a report analyzing the various benefits of the PTC versus the ITC. That report assumes the value to the developer of the ITC and the cash grant are the same. You can download a copy of the report from the Windustry web site:

www.windustry.org/news/ptc-itc-or-cash-grant-which-should-a-developer-use