Search
 

Sequestration Impacts on 1603 Grants for Solar Projects

PALO ALTO, CA—It remains to be seen what impact, if any, Notice 2014-39 will have on solar energy projects that were planned and financed prior to sequestration, but find out what it does mean in this EXCLUSIVE column on the subject.

By Michael C. Polentz, co-chair of the Real Estate & Land Use Practice Group at Manatt, Phelps & Phillips LLP | Updated on July 10, 2014

PALO ALTO, CA—The American Recovery and Reinvestment Act of 2009 created the Section 1603 Grant in Lieu of Tax Credit program for qualified renewable energy property (“Section 1603”). Under Section 1603, generally, the Secretary of the Treasury provided grants (as an alternative to “investment tax credits” issued pursuant to Section 48 of the Internal Revenue Code of 1986 (“IRC”)) to eligible persons, who place in service qualified energy property and apply for such payments. Grants are awarded under Section 1603 to reimburse eligible applicants for a portion of the expense of such property. Section 1603 further provides that the amount of a grant with respect to any qualified energy property is the applicable percentage (either 30% or 10%) of the basis of such property.

On August 2nd, 2011 Congress passed and the President signed the “Budget Control of Act of 2011”.  Among other things, the Budget Control Act raised the federal debt limit, created a so-called “Super Committee” to identify $1.2 trillion in budget savings over the following ten (10) years and provided for expedited consideration in Congress of the Super Committee’s recommendations.  As we all know, the Super Committee failed to agree upon much of anything.  The impact of this failure was the implementation of budget sequestration, which provided for automatic, across-the-board spending reductions.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.