SUMMARY OF RENEWABLE ENERGY AND ENERGY EFFICIENCY STIMULUS FUNDS FROM THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 (H.R. 1)
Last updated: 12/29/09
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Summary of ARRA Funds:
OVERVIEW OF “American Recovery and Reinvestment Act of 2009”
The American Recovery and Reinvestment Act (herein referred to as “ARRA”) passed by the 111th Congress and signed into law by President Obama on February 17th, 2009, is a comprehensive bill to create jobs, restore economic vitality, and strengthen America's middle class through measures that modernize the nation's infrastructure, enhance America's energy independence, expand educational opportunities, preserve and improve affordable health care, provide tax relief, and protect those in greatest need. Learn more on www.recovery.gov.
Three-Year Extension of Production Tax Credit (PTC)
ARRA provides a three-year extension of the in-service deadline for the Production Tax Credit (PTC) for electricity derived from wind, geothermal, biomass, hydropower, landfill gas, waste-to-energy and marine facilities. The in-service deadline for wind facilities is now December 31, 2012 (formerly January 1, 2010), and for the other renewable resources listed above is now December 31, 2013 (formerly January 1, 2011). The law also allows businesses eligible for the federal PTC to receive a grant from the U.S. Treasury Department instead of taking the PTC for new installations. Click here for a complete explanation of the PTC. (Source: ACORE, DSIRE)
Residential Renewable Energy Tax Credit
ARRA removes the $2,000 maximum credit limit for all eligible technologies (except fuel cells) placed in service after 2008, a provision previously only available to solar PV. A taxpayer may now claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the U.S. used as a residence by the taxpayer with the following eligible technologies: solar hot water, solar PV, wind, fuel cells, geothermal heat pumps, and other solar electric technologies. Click here for complete detail on the Residential Renewable Energy Tax Credit. (Source: DSIRE)
Investment Tax Credit Accessible to All Renewable Energy
ARRA allows businesses eligible for the federal PTC to take the federal business energy investment tax credit or to receive a grant from the U.S. Treasury Department instead of taking the PTC for new installations. The new law also allows taxpayers eligible for the business energy investment tax credit to receive a grant from the U.S. Treasury Department instead of taking the business energy tax credit for new installations. This applies to project developers of wind, geothermal, biomass and other technologies eligible for the PTC. Click here for a complete explanation of the ITC. (Source: ACORE, DSIRE)
Repeals Subsidized Energy Financing Limitation on ITC
ARRA allows businesses and individuals to qualify for the full amount of the ITC, even if their property is financed with industrial development bonds or other subsidized energy financing. (Source: ACORE)
Renewable Energy Grant Program in Lieu of Tax Credits
ARRA allows project developers to apply for a grant from the Treasury Department in lieu of the ITC. The grant will be equal to 30% of costs of property that is part of a qualified facility, qualified fuel cell property, solar property, or qualified small wind property, and 10% of all other property. Grants are available to eligible property placed in service in 2009 or 2010, or placed in service by the specified credit termination date, if construction began in 2009 or 2010. Grant applications must be submitted by 10/1/2011. It will be issued within sixty days of the facility being placed in service or, if later, within sixty days of receiving a grant application. It is important to note that only tax-paying entities are eligible for this grant. Click here for complete details on the Renewable Energy Grant Program. (Source: ACORE, ASE, DSIRE)
Manufacturing Tax Credits (Qualifying Advanced Energy Project Investment Tax Credit)
ARRA establishes a new investment tax credit to encourage the development of a U.S.-based renewable energy manufacturing sector. In any taxable year, the investment tax credit is equal to 30% of the qualified investment required for an advanced energy project that establishes, re-equips or expands a manufacturing facility that produces any of the following: Equipment and/or technologies used to produced energy from the sun, wind, geothermal or "other" renewable resources; fuel cells, microturbines or energy-storage systems for use with electric or hybrid-electric motor vehicles; equipment used to refine or blend renewable fuels; equipment and/or technologies to produce energy-conservation technologies (including energy-conserving lighting technologies and smart grid technologies). In total, $2.3 billion worth of credits may be allocated under the program. Click here for complete details on the tax credit. (Source: DSIRE)
Five Year Carry-Back Provision for Operating Losses of Small Businesses
ARRA extends the carry-back period for net operating losses (NOL) from two to five years for tax years 2008 and 2009. An eligible NOL includes the NOL for any taxable year, ending in 2008, or if the taxpayer chooses, any taxable year beginning in 2008. An election under this provision may only be taken for one taxable year. (Source: ACORE)
Study of Electric Transmission Congestion
ARRA includes a direct spending requirement for the U.S. Secretary of Energy to study the transmission issues facing renewable energy, to be included in the pending study of electric transmission congestion slated for completion August 2009. (Source: ACORE)
Clean Energy Renewable Bonds (CREBs)
ARRA provides an additional $1.6 billion of new clean energy renewable bonds to finance solar thermal electric, solar PV, landfill gas, wind, biomass, hydroelectric, geothermal electric, municipal solid waste, hydrokinetic power, anaerobic digestion, tidal energy, wave energy, and ocean thermal projects. CREBs may be issued by electric cooperatives, government entities (states, cities, counties, territories, Indian tribal governments or any political subdivision thereof), and by certain lenders. However, the IRS has not yet announced that it is accepting applications for the new allocations made in 2008 and 2009, and it has not issued official guidance detailing how the program will operate. Click here for complete details on CREBs. (Source: DSIRE)
Renewable Energy Loan Guarantee Program
ARRA extends the authority of the US Department of Energy to issue loan guarantees and appropriated $6 billion for this program. Under this act, the DOE may enter into guarantees until September 30, 2011. Eligible projects include renewable energy projects that generate electricity or thermal energy and facilities that manufacture related components, electric power transmission systems, and innovative biofuels projects (funding limited to $500 million for biofuels). Davis-Bacon wage requirements apply to any project receiving a loan guarantee. (Source: ACORE, DSIRE)
Research and Development, Demonstration Projects
ARRA provides $2.5 billion in direct spending for renewable energy and energy efficiency R&D, demonstration and deployment activities. (Source: ASE)
Modified Accelerated Cost-Recovery System (MACRS) + Bonus Depreciation (2008-2009)
ARRA extends (retroactively to the entire 2009 tax year) the 50% bonus depreciation provision for eligible renewable energy systems (this provision was originally established in the Economic Stimulus Act of 2008). To qualify for bonus depreciation, a project must satisfy these criteria: the property must have a recovery period of 20 years or less under normal federal tax depreciation rules; the original use of the property must commence with the taxpayer claiming the deduction; the property generally must have been acquired during 2008 or 2009; and the property must have been placed in service during 2008 or 2009 (or, in certain limited cases, in 2010). Click here for complete details. (Source: DSIRE)
Department of Defense Energy and Efficiency Programs
ARRA provides $300 million in direct spending to the US Department of Defense for the purpose of research, testing and evaluation of projects to energy generation, transmission and efficiency. ARRA provides an additional $100 million for Navy and Marine Corps facilities to fund energy efficiency and alternative energy projects and $75 million for Defense-Wide funding of research, development, text and evaluation projects, including pilot projects, demonstrations, and energy efficiency manufacturing enhancements. (Source: ACORE, ASE)
Energy Efficiency and Conservation Block Grant Program
ARRA provides $3.2 billion to assist local governments in implementing energy efficiency and conservation programs, of which: $2.8 billion is awarded based on existing formula and $400 million is awarded on a competitive basis. (Source: ASE)
Energy Efficient Appliance Rebate Programs
ARRA provides $300 million for the Energy Star Program and for matching grants for state rebates to consumers for buying energy efficient Energy Star products to replace old appliances, and for the Energy Star Program. This was originally authorized under Section 124 of the Energy Policy Act of 2005. (Source: ASE)
Residential Energy Efficiency Tax Credit
ARRA extends tax credits for energy efficiency improvements in the building envelope of existing homes and for the purchase of high-efficiency heating, cooling and water-heating equipment. Efficiency improvements or equipment must serve a dwelling in the United States that is owned and used by the taxpayer as a primary residence. Homeowners may claim 30% of costs of all equipment purchased during the two-year period of 2009 and 2010; the maximum for all improvements combined is $1,500 ARRA repeals a previous limitation on the use of the credit for eligible projects also supported by "subsidized energy financing." Click here for complete details on the Residential Energy Efficiency Tax Credit. (Source: DSIRE)
Assisted Housing Grants and Loans
ARRA provides $250 million will support a program to upgrade HUD-sponsored low-income housing to increase energy efficiency. An additional $1 billion from the Public Housing Capitol Fund funding will go to fund improvements in energy efficiency, including investments that leverage private sector funding or financing for renovations and energy conservation retrofit investments. (Source: ASE)
ARRA provides $9.75 billion for public safety and other government services, which may include assistance for elementary and secondary education and public institutions of higher education, and for modernization, renovation or repair of public school facilities and public institutions of higher education facilities, including modernization, renovation, and repairs that are consistent with a recognized green building rating system. (Source: ASE)
Weatherization Assistance Program (WAP)
ARRA provides $5 billion for the weatherization of low-income family homes. This was originally authorized in Title IV, Part A of the Energy and Conservation and Production Act, Public Law 94-385. (Source: ASE)
ARRA provides the following funding for federal buildings: $3.6 billion for Department of Defense energy efficiency projects and modernization of facilities, $4.5 billion to the General Services Administration (GSA) for measures to convert GSA facilities to High-Performance Green Buildings; and $400 million to establish the Office of Federal High Performance Green Buildings.
Green Job Research and Job Training
ARRA provides $500 million for research, labor exchange and job training projects to prepare workers for careers in energy efficiency and renewable energy industries, along with up to $37.5 million provided for Job Corps Centers, which may include training for careers in energy efficiency. (Source: ASE)
ARRA provides $11 billion to modernize the nation's electricity grid with smart grid technology. This includes $4.5 billion for the DOE Office of Electricity Delivery and Energy Reliability for activities to modernize the nation's electrical grid, integrate demand response equipment and implement smart grid technologies. In addition, $6.5 billion is provided for two federal power marketing administrations to assist with financing the construction, acquisition, and replacement of their transmission systems. The Act also increases federal matching grants for the Smart Grid Investment Program from 20% to 50%. (Source: ACORE)
State Energy Program Funding
ARRA provides $3.1 billion for the Department of Energy’s State Energy Program (SEP), which provides grants and funding to state energy offices for energy efficiency and renewable energy programs. The funding is conditioned on state Governors’ assurances regarding regulatory policies, building code requirements and the prioritization of existing state programs.
The above summary is based on information from: American Council on Renewable Energy (ACORE), Alliance to Save Energy (ASE), and Database of State Incentives for Renewables and Energy Efficiency (DSIRE)
Rapid Deployment Energy Efficiency (RDEE) Toolkit Help Line
State Energy Offices, Program Administrators, and Local Governments can now call the U.S. Environmental Protection Agency's (EPA's) Rapid Deployment Energy Efficiency (RDEE) Toolkit Help Line! EPA designed the RDEE Help Line to assist state and local governments in deploying American Recovery and Reinvestment Act (ARRA) energy efficiency funding in a successful, sustainable manner by having a go-to resource for RDEE questions.
Call 866-602-7333 or email RDEE@icfi.com and you will receive a response to your inquiry within one business day. The RDEE Toolkit Help Line will help you plan and implement proven energy efficiency programs, such as:
The RDEE Toolkit was developed through a joint effort of EPA and the U.S. Department of Energy (DOE), with technical input from the Leadership Group of the National Action Plan on Energy Efficiency.
All questions related to funding provided by the American Recovery and Reinvestment Act should be directed to DOE: http://www.energy.gov/recovery.
Contact the RDEE Toolkit Help Line via telephone or e-mail today! You will receive a response within one business day.
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