SMALL WIND INCENTIVE NEWS RELEASE
Brainerd, MN Winkelman’s Environmentally Responsible Construction (WERC) announced today that more details were just released from the federal government about the new incentives for owners and prospective owners of small wind turbines. There is free money, in the form of a new 30% grant (or investment tax credit), available to offset the purchase of a small wind turbine. This is the most exciting benefit to ever be offered for small wind machines.
How to Use the New U.S. Treasury Grant Program and Who Is Eligible
by Ron Stimmel,
Small-Wind Advocate -
American Wind Energy Association
The American Recovery and Reinvestment Act of 2009 (ARRA), passed on February 17, 2009, includes a number of provisions potentially benefiting consumers of small wind systems with capacities at or below 100 kilowatts (kW).
One of these provisions is a new cash grant program through the U.S. Treasury that certain taxpayers may elect to use in lieu of claiming the 30% federal Investment Tax Credit (ITC). However, this grant is NOT applicable to residential consumers (as defined in Internal Revenue Code Section 25D), but rather only to entities as defined in Sections 45 and 48, which, generally, are businesses. For more information on these tax code sections Click Here
The U.S. Treasury also has not yet issued specific guidance on the use of this grant and other new tax provisions in AARA, but is expected to within approximately 90 days. Upon issuance, AWEA will provide its members with more detailed information on the use of these tax provisions.
AWEA
does not provide tax advice and nothing in this document is intended to constitute tax advice. Taxpayers should consult their own tax advisors with respect to any questions regarding the application of Federal or state or local tax law. Nothing contained in the body of this document is intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.
Below are answers to some frequently asked questions about this program,
Question: What is the grant program?
Answer: ARRA provides that in lieu of certain business energy credits (including the small wind energy credit) an owner may elect to apply for a cash grant from the Department of Treasury for an amount equal to the foregone credit (i.e., 30% of the cost of a small wind facility). |
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Question: Who is eligible for the grant?
Answer: In general, taxpayers that are eligible to claim the business tax credit for qualified properties may apply for the grant. Tax-exempt entities (e.g., governmental entities, charities, co-operatives) or partnerships with a tax-exempt partner are not eligible for the grant. |
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Question: Which small wind properties qualify for the grant?
Answer: The property must otherwise qualify for the business credit described above and generally must be placed in service in 2009 or 2010. If the property is placed in service after 2010, and before 2017, construction of the property must have begun in 2009 or 2010. The grant program is not available for property eligible for the residential tax credit. |
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Question: How does one apply for the grant?
Answer: The Treasury has not yet issued guidance for grant applications. ARRA provides that grants will be paid during the 60-day period beginning on the later of (1) the date of the application for the grant, or (2) the date the property is placed in service. No grant will be made unless the application for the grant is received before October 1, 2011. |
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Question: How is the grant treated for tax purposes?
Answer: The receipt of the grant is not taxable. In general, the rules otherwise applicable to the investment tax credit (recapture rules, no reduction for government subsidies, partial reduction in depreciable basis, etc.) apply to the grant. |
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Question: For what types of issues should a consumer consult a tax advisor?
Answer: A consumer should consult his or her tax advisor with respect to any issue involving either credit. |
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For more clarification, contact our industry advocate:
Ron Stimmel
Small-Wind Advocate
American Wind Energy Association
1501 M St. Nw, 10th Floor
Washington, D.C. 20005
Ph: (202) 383-2546 |
To get further information online go to the American Wind Energy Association
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