Congress last week passed a one-year extension of the Department of Treasury Section 1603 tax grant program in their tax bill compromise.
The United States Tax Grant Program (TGP), also known as 1603, was responsible for a large portion of the renewable energy projects built throughout the U.S. in 2010. Originally passed as part of the 2009 stimulus package, the TGP was supposed to expire at the end of December.
Trade groups in Washington have been pushing hard for an extension of the program, which provides a cash payment of up to 30 percent of equipment costs in place of the Investment Tax Credit.
Under the extension, property will qualify if it is placed in service in 2011 or if construction begins before 2012 and the project is placed in service before the applicable credit termination date (i.e., January 1, 2013 in the case of large wind projects, January 1, 2014 in the case of biomass, trash, marine and certain other facilities, and January 1, 2017 in the case of solar, geothermal, fuel cells, microturbines, combined heat and power, small wind, and geothermal heat pump facilities). Under prior law, a facility was required to be placed in service, or construction must have begun, before January 1, 2011.
National Hydropower Association Executive Director Linda Church Ciocci said in a press release: "NHA applauds the House and Senate for approving an extension of the Section 1603 program this week. Incentives for hydropower and other renewable energy development are critical for our country to expand generation of clean energy resources and promote the local economic benefits and job creation opportunities associated with these projects."
Church Ciocci added: "NHA looks forward to working with the 112th Congress next year on additional growth policies that were not included in the bill, such as the 48C renewable energy manufacturers investment tax credit, the clean renewable energy bonds (CREBs) program and other important incentives to drive deployment for conventional hydropower, pumped storage and marine and hydrokinetic resources."
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