Treasury Releases Much Awaited Rules on Clean Energy Cash Grant Program
Finally, the Treasury Department is shedding some light on the Obama administration’s $16.4 billion clean energy funding, specifically, on the much awaited $3 billion direct cash grant program. Since word on this funding program first came out last winter, the clean energy sector has been impatiently awaiting more details on how to access the funds.
So far the cash grants program is the most advanced of all the clean energy funding. In a note commenting the release of a Guidance Document by Treasury , the tax and energy practice of international law firm Winston & Strawn noted that the government’s direct cash initiative would transform how clean energy projects are funded.
The firm writes:
After reviewing these materials, the consensus generally is that this Guidance Document was generally worth the wait, in that Treasury has crafted a set of reasonable, practicable, and user-friendly rules. As a result, we anticipate that the ITC Direct Payment program will move forward rapidly and transform the way in which U.S. renewable/alternative energy assets are financed over the next few years.
In response to the pressing demand, earlier this month Treasury released a first batch of information, including a pro-forma application.
The comprehensive guidance released yesterday includes many of the rules already talked about on this site.
The grants will only support 10-30 percent of a project cost and developers can only access the funds once the project has received regulatory approval or is under construction during the 2009-2010 period. Holders of investment tax credits (ITC) will be able to convert these credits into an equivalent (nontaxable) cash payment from the Government.
Besides the cash grants there are dozens of other government funding programs available as part of the stimulus law but most will not be released for some time. For a look at these, take a look here.
