Financial Incentives for Solar Energy - Section 1603 In a Nutshell

By now, much has been written about the American Reinvestment and Recovery Act of 2009.  In fact, this legislation has spawned such abbreviations and acronyms such as:  ARRA, the Recovery Act, or quite simply, the "Stimulus".  Whichever your preference, the purposes of this legislation included the preservation and creation of jobs, the promotion of economic recovery in the near term, and the investment in infrastructure that will provide long-term benefits. 

Of the Recovery Act's initiatives, most people are familiar with the $8,000 homebuyer credit that just expired on April 30, 2010 or a deduction for sales taxes on qualifying new car purchases.  For the real estate development community or proponents of renewable energy, one of the Recovery Act's mandates has generated (no pun intended) little press but packs a big punch. 

Section 1603 of the Recovery Act appropriated grant monies to reimburse qualified applicants for up to 30% of the construction costs for specified renewable energy property.  Provided that the property is placed into service by the termination date provided in the Recovery Act, the Treasury Department will pay the credit amount to applicant within 60 days of the date the application is deemed complete.  Applicants can also assign their rights to the payment to a bank or financial institution. 

But, the window is rapidly closing on this extraordinary financial opportunity.  The application filing deadline expires on October 1, 2011.  However, construction on a project must commence in 2010 in order to qualify for the Section 1603 payment, even though the application may not be submitted.