On December 17, 2010, Treasury’s popular renewable energy grant program was extended with the passage of The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. This legislation also extends certain tax depreciation benefits available for renewable energy projects.

Treasury Grant Program, Generally

The Treasury grant program provides a cash grant for the development of certain renewable energy projects equal to 30 percent (or 10 percent for certain technologies; see table below) of the eligible costs of the project. Grant payments are made within 60 days after the facility is placed in service and a complete application is filed. The Treasury grant is available in lieu of the Internal Revenue Code (IRC) § 45 production tax credit and the IRC § 48 investment tax credit.1

There is no minimum or maximum amount of grant available to a particular project, and there is no cap on the total amount of funds available under this program. To date, Treasury has awarded $5.8 billion of grants in the 16 months since it began accepting applications in August 2009. Those awards ranged from as little as $304 to as much as $218 million.

Extension of Treasury Grant Program

The Treasury grant was originally enacted in February 2009 in the American Recovery and Reinvestment Act of 2009. As originally enacted, the Treasury grant program was available for renewable energy projects that were either: (1) placed in service in 2009 or 2010; or (2) placed in service after 2010 and before the applicable credit termination date (see table below), but only if construction of the renewable energy project began during 2009 or 2010.

As amended, the Treasury grant program has been extended by one year. Consequently, the grant program is now available for renewable energy projects that are either: (1) placed in service in 2009, 2010 or 2011; or (2) placed in service after 2011 and before the applicable credit termination date for the project, but only if construction of the renewable energy project began during 2009, 2010 or 2011. The legislation made no other substantive changes to the grant program.