The funding for this effort is made available through the American Recovery and Reinvestment Act. The funding is to fulfill the goal of expanding development of renewable energy projects throughout the US and creating new jobs.
DOE Secretary Chu said “This program will play a major role in encouraging private sector capital to invest in clean energy development, creating new jobs that can’t be outsourced. It is an investment that will continue to help our economy grow and ensure advancement in clean and renewable energy development.”
“As we move quickly to get our economy back on track and to repair the financial system, we must make investments that lay the foundation for a stronger economic future,” said DOT Secretary Timothy Geithner. “Too many renewable energy projects have stalled due to a lack of financing. The Recovery Act program will lead to investment in our long-term energy needs, move us towards energy independence, increase jobs at energy-specific businesses, and protect our environment.”
The Recovery Act authorized DOT to make direct payments to companies that create and place in service renewable energy facilities beginning January 1, 2009. Previously, these companies could file for a tax credit to cover a portion of the renewable energy project’s cost; under the new program, applicants would agree to forgo future tax credits in favor of an immediate reimbursement of a portion of the property expense. DOE will assist DOT in implementing this program by reviewing the technical merits of the applications.
In previous years, the tax credit has been widely used. The rate of new renewable energy installations has fallen since the economic downturn began, as projects had a more difficult time obtaining financing. DOT and DOE expect a fast acceleration of businesses applying for the direct cash payment in lieu of the tax credit, allowing for an immediate stimulus in local economies.
Earlier in 2009, DOE and DOT held a stakeholder outreach conference call to assist companies in applying for the program. They also made available in advance the program’s terms and conditions, guidance, and a sample application so that companies could prepare applications in advance of the launch of the web-based application, aimed at expediting the distribution of program funds to eligible businesses.
