Dear Free Hot Water Dealers and Distributors and blog readers,

It’s not too late! That is, it’s not too late to close commercial contracts that can qualify for the 1603 Treasury Grant Program (TGP) that is set to expire at the end of 2011, just 6 weeks away. A 5% safe harbor provision or starting on the install with a signed contract before the end of 2011 allows customers to be eligible.

In an effort to facilitate more solar thermal installations before the TGP ends, we’ve discounted a range of pre-engineered, pre-packaged OG-100 commercial solar thermal systems that can qualify for the TGP for commercial applications.

Plus, in addition to the pre-engineered solar thermal packages, we’re also providing our dealers purchasing the pre-engineered systems with simplified DIY TGP instructions, a TGP checklist, and a Sample TGP Application.

Paul Burrowes, our COO, explained, “At this point, it looks like the 1603 Treasury Grant Program is ending, but solar thermal installers may not realize that they still have time beyond December 31st, 2011, to install commercial systems. Under the TGP rules, there is a 5% safe harbor provision. Under certain conditions, an apartment building owner, for example, can purchase 5% or more of the equipment from the installer before the end of 2011 and qualify for the TGP. Under these conditions, the balance of the installation and equipment can be accomplished after 2011.”

Since 2009, the TGP has provided commercial entities a 30% cash grant towards to costs of solar projects in lieu of the 30% ITC. All solar technologies qualify, including solar water heating and other commercial solar thermal applications.

For example, pre-engineered systems are ideal for hotels, multi-family residents, nursing homes, hospitals, restaurants, laundry facilities, and many other commercial and industrial applications.

Installers who can sign contracts for these applications and purchase at least 5% of the equipment will enable their clients to take advantage of the 30% cash grants available under TGP.

The 5% Safe Harbor

Under the 5% safe harbor, if the applicant (the solar hot water purchaser or developer) pays or incurs 5% or more of the total cost of the specified energy property before the end of 2011, the applicant is eligible for the TGP. Alternatively, costs paid or incurred by a person providing property to the applicant, such as the solar hot water installer, can also be included under the 5% safe harbor provision.

In addition, Free Hot Water’s pre-engineered solar hot water systems can help qualify applicants through showing that “physical work of a significant nature” has begun by the end of 2011. Under this provision:

• “Physical work of a significant nature” can include any physical work at the site where the solar hot water system is going to be installed.
• It may also includes physical work that has taken place under a binding written contract for the manufacture, construction, or production of the solar thermal system by the applicant’s facility, provided the contract is entered into prior to the work taking place.

Other key points to keep in mind:

• The person applying for the TGP must be a for-profit business and not a federal, state or local government, or non-profit business.
• A project performance report is required on an annual basis for a period of 5 years after the property was placed in service.
• Regardless of eligibility method, all applications must be submitted to the Treasury Department before the statutory deadline of October 1, 2012.

For more information on the 1603  TGP program, here’s a link to the Treasury Dept web site.

Burrowes said, “We sincerely hope the TGP gets extended. It has helped us and many of our dealers grow our business and create American solar jobs. By providing our discounts on pre-engineered solar thermal systems as the program possibly sunsets, we’re hoping to enable our Free Hot Water solar thermal installers to close contracts under the 5% safe harbor or begin construction before the end of 2011.”

You can see all of our line of pre-engineered commercial 0G-100 kits on our online catalog. Free Hot Water’s TGP forms and sample applications are available to all Free Hot Water dealers. Contact us for more information.