At the end of 2010, Congress passed and the President signed into law the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. As part of this law, the U.S. Department of Treasury – Renewable Energy Grants program, sometimes referred to as “Section 1603” program, was extended for 2011.
So, what is this grant program and who can benefit from it? We’re going to do our best to give you the basics, and hopefully you can use resources below to apply—if you’re eligible.
What is it? As part of the original stimulus packaged passed in 2009, “Section 1603” allows commercial businesses to receive a 30% cash grant from the Feds instead of the 30% Federal Investment Tax Credit. (See prior blog post about the 30% solar ITC.) Essentially, the 1603 program allows for-profit businesses to receive a 30% refund off the gross cost of their solar system.
Who is eligible? The provisions are fairly broad—for businesses. That is, you can’t get this 30% solar grant if you’re a resident, a non-profit, or a government entity. You’ve got to be a business that pays taxes, though it doesn’t mean you have to owe taxes. Quite the opposite. Unlike the 30% investment tax credit, you actually get a check from the Feds, not just a credit that you can use towards paying your taxes.
For potential solar hot water customers, this means that you can own a hotel, apartment building, Laundromat, nursing home, for-profit hospital, car wash, and qualify for this 30% cash-back program from the Feds. On the other hand, if you’re a residential homeowner, a school, college, or non-profit hospital, for example, you will not qualify. However, if you own a single family rental home under an LLC or Inc. and want to provide solar water heating for your tenants, that will qualify. Also, if you are a real estate developer with multiple single family homes, purchasing a residential solar water heating system for each home will also qualify for the cash grant.
What kind of solar system is eligible? Pretty much, any solar system can be reimbursed except for solar pool heating and passive solar construction. So, if your for-profit business wants to heat or cool the building with a solar thermal system, now’s the time. Naturally, solar water heating is also eligible, as well as solar electric systems.
By when do I have to have solar system installed? Your solar system needs to be installed sometime between 2009 and the end of 2011. They’re also allowing construction on the system to have begun by 2011.
Grant applications must be submitted by October 1, 2012, however. The U.S. Treasury Department will make payment of the grant within 60 days of the grant application date or the date the property is placed in service, whichever is later.
Can I get the solar 30% 1603 cash grant AND the 30% Investment Tax Credit too? No. It’s one or the other, and don’t even think about trying to do both. The IRS knows all. However, you are still eligible for any local or state rebates, so that’s nice. Also, you can receive any other local or federal tax benefits (other than the 30% investment tax credit.)
Those are the broad strokes of the program. If you want to find out more and apply for the grant, use this handy-dandy government website.
More questions? Give us a shout. We’ll do our best to help.