Free cash from the feds for clean energy, up front — not enough to cover a whole project, but enough to get investors to pony up more. That’s the basic idea of a new stimulus program that the Department of Energy and the Treasury Department have outlined today and which could potentially provide about $3 billion in grants for some 5,000 projects. Rather than waiting around for a tax credit, clean energy developers can apply for grants for up to 30 percent of their project costs (some technologies like geothermal heat pumps and microturbines will qualify for only up to 10 percent of eligible costs), encouraging investors to finance the remainder.
Congress drafted the general framework of this program, described in official language as “cash assistance in lieu of tax credits,” in the Recovery Act. What’s new today is 20 pages worth of guidelines and a sample application form that project developers can use to figure out if they might qualify for the grants, although the feds won’t start actually accepting applications until next month. The Treasury Department’s Michael Mundaca, Acting Assistant Secretary for Tax Policy, said in a call with reporters today, “We’re trying to get as much information out as quickly as possible.” But according to the Solar Energy Industries Association, a trade group, that hasn’t been quick enough.
In other words, in addition to funding tech investments and retrofits with tax dollars in the near term, he wants the DOE to provide advanced design tools at affordable prices or for free so companies can implement them at a relatively low cost.
At this point, the Senate still has to negotiate and vote on
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