Energy and Clean Technology Alert - Congress Recharges Tax Incentives for the Clean Energy Sector


As part of the $858 billion Middle Class Tax Cut Act of 2010 extending the Bush-era tax rates and a variety of

expiring business tax credits, Congress extended several key tax incentives which benefit the clean technology

and renewable energy sectors.

Energy-Specific Incentives

1603 Treasury Grant Program

Congress extended for one year the start-of-construction deadline for the cash grant in lieu of tax credit program, established in Section 1603 of the American Recovery and Reinvestment Act (ARRA).

The Section 1603 program converts existing tax credits for renewable energy into an up-front payment from the Treasury Department shortly after a qualifying facility is placed into service. The program proved popular with renewable energy developers, who typically face large up-front capital costs and lack sufficient income to fully utilize tax credits. After the financial crisis made it extremely difficult for renewable energy developers to turn to large financial institutions to monetize the tax credits, the ARRA cash-grant program significantly increased renewable energy installations. For example, new wind power installations in 2009 (nearly 10 GW) increased by 20% over the previous year, and new solar photovoltaic installations (429 MW) increased 38% over the 2008 total.

Please see full alert below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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