The Treasury and Energy Departments plan to distribute at least $3 billion for renewable energy projects to companies that agree to forgo future tax credits.
The two federal agencies have begun accepting applications for the program. They expect to distribute the money to approximately 5,000 bio-mass, solar, wind and other types of renewable energy projects. The money is coming out of the stimulus bill passed by Congress in February.
The American Recovery and Reinvestment Act authorized the Treasury to make direct payments to companies that create and place in service renewable energy facilities beginning Jan. 1, 2009. Previously, these companies could file for a tax credit to cover a portion of the renewable energy projects 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. The Energy Department will assist the Treasury in implementing this program by reviewing the technical merits of the applications.
In previous years, the tax credit has been widely used, but the rate of new renewable energy installations has fallen since the economic downturn began, as projects had a more difficult time obtaining financing. The Treasury and Energy Departments 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.
"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," said Energy Secretary Steven Chu in a statement.
Companies interested in applying for the program can click here for further information.
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