Commercial Solar Grants: Section 1603
In February 2009, Congress passed the American Recovery and Reinvestment Act (ARRA) in a bid to provide fiscal stimulus to the flagging U.S. economy. Section 1603 of ARRA authorizes the Treasury to provide grants worth 30 percent of the total cost of qualifying commercial renewable energy projects. Businesses were previously permitted to take a 30 percent tax credit.
In brief, system owners that submit all the required documentation for the grant program will receive a check no more than 60 days following the completion of their project. Given that commercial solar energy systems can cost hundreds of thousands of dollars, you can see why 30 percent is a meaningful incentive.
Solar Grant Gets a Second Wind
The “Section 1603″ grant, as it has become known, was designed to provide short-term support to commercial solar energy project — and few industry experts expected the program to be extended beyond 2010.
That’s exactly what happened in December 2010, however, when Congress made a last-minute decision to keep commercial solar grants alive through the end of 2011.
IMPORTANT: To take advantage of the extended deadline, solar energy projects must begin construction by December 31, 2011. If your company is looking into solar power, we cannot stress enough the importance of starting your project EARLY. The last thing you want to do is be up against a fast-approaching deadline in November or December, when the weather may be cold and/or unaccommodating to the types of pre-construction activities that may be necessary for your commercial solar power project. Submit an inquiry today – you only stand to gain by asking questions and requesting information sooner rather than later.
Solar Grant Benefits
It’s hard to overstate the benefits that the cash grant program bring to commercial solar energy projects. Here’s a quick glimpse of the macro view:
* According to the Solar Energy Industries Association (SEIA), the solar grant program has allowed businesses to complete 1,100 solar projects in 42 states, generating $18 billion in investment.
* At the same time, solar grants have yielded enough new solar capacity to power 200,000 homes and provide jobs to more than 93,000 American.
* At the company level, the Treasury grant program provide cash on the books (60 days following project completion) rather than a tax credit, which can be difficult to monetize, depending on your company’s profitability and the timing of the credit.
What Does it Mean for Your Company?
In the end, we’ve seen solar incentives come and we’ve seen incentives go. Section 1603 grants provide real benefit to any commercial solar energy project. So, again, if your company is looking into its options, we really encourage you to move forward sooner rather than later. There’s really no telling whether the Treasury grant will be available beyond 2011.
