Treasury Clarifies "Commencement of Construction" for Energy Project Cash Grants


Section 1603 of the Act's tax title appropriates funds for payments to persons who place in service specified energy property

during 2009 or 2010, or after 2010 if construction commences no later than December 31, 2010 and the property is placed in

service by a certain date known as the credit termination date. Depending on the type of energy property placed in service, the

credit termination date is either January 1 of 2013, 2014 or 2017.

The grant program provides a grant in lieu of tax credit equal to 30 percent of the qualifying project property costs for solar,

wind, biomass, geothermal, fuel cell, waste energy, hydropower, and marine power projects, and 10 percent of the project

costs for microturbines, thermal heat pump systems, and combined heat and power systems.

As the December 31, 2010 deadline is looming, the meaning of the term "commencement of construction" is significant for any person hoping to receive the grant.

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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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