30% Cash Grant program to continue into 2011
In December 2010, Congress moved to extend the Department of Treasury’s Section 1603 program. Due in part to the lobbying efforts of the Solar Energy Industries Association (SEIA) – the extension of the 1603 Treasury Program will continue to provide commercial solar investors a cash grant in lieu of the 30 % solar investment tax credit (ITC) created by the Energy Policy Act of 2005.
The 1603 Treasury Program – created by the American Recovery and Reinvestment Act of 2009 – included modifications to the ITC and other renewable energy tax incentives to address the lack of available tax equity financing.
The goals of the program were to streamline the financing of renewable energy projects and to provide access to funds when project developers’ tax burdens were insufficient to take advantage of the tax incentives and financing was hard to obtain and expensive. The program helped the renewable energy industry recover in 2009 when the lack of tax equity financing in late 2008 brought many projects to a halt.
Solar energy continues to be on the rise in the U.S. and quickly becoming one of the economy’s fastest growing sectors. Between the decrease in costs of solar panels and incentives such as the 1603 Treasury Program, we expect to see significant growth within the commercial space – specifically within the mid-market segment.