U.S. Treasury Announces 30% Grant Incentive for Renewable Energy Projects

Daylighting’s approval as a renewable energy technology Under EPACT 2005 amendment in January, 2008 may cause the art of daylighting to become mainstream.

On May 22, 2009, at a conference regarding solar energy financing, a Treasury Department official commented favorably on the new program that lets renewable energy providers claim cash grants in lieu of tax credits. Ellen Neubauer is the Program Grants Manager within the Treasury Department’s Office of Fiscal Assistant Secretary. In her remarks at the IPED solar energy conference, she confirmed that her office has been delegated the management and supervision responsibility of the grants in lieu of tax credits (the “Cash Funding”) program under Section 1603 of the American Recovery and Reinvestment Act of 2009 (the “ARRA”).

Section 1603(b) of the ARRA provides that the amount of the Cash Funding is equal to the tax credits which could be claimed on certain energy property and is generally equal to 30% of the cost basis of the energy property. Under the ARRA, the Secretary of the Treasury shall make payment of any Cash Funding during the 60-day period beginning on the later of (1) the date of the application for such Cash Funding, or (2) the date the specified energy property for which the Cash Funding is being made is placed in service.

Details are still yet to be worked out on what documentation and process will be followed. However, the Federal Government has stipulated a June 30, 2009 deadline for implementation of the program and documentation process for the program. The use of daylighting and controls with documentation for energy savings does fall under the EPACT 2005 designation. Under the Federal Renewable Energy Requirement Guidance under EPACT 2005 and Executive Order 13423, section 2.2.2 lays out New Renewable Energy Sources Qualified to count toward the EO13423 Requirement. Under this section it stipulates, “Agencies may also count qualified non-electric energy from new renewable energy sources of the types detailed in sections 2.2.3 though 2.2.13. Examples include but are not limited to thermal energy from solar ventilation pre-heat applications of qualified hydro resources. Lighting examples include daylighting technologies.

As I have always reported, high performance daylighting with lighting controls is the most cost effective solar option for the majority of building owners that pays for itself with quick ROI’s. However, the opportunity for rebates and grants to implement the technology are only going to drive the use of daylighting into the mainstream. After all, as I always say… There’s no greater efficiency than OFF!