Editors’ Note: The content you will find in this new section of our website is designed to help get the word out about funding opportunities available in Colorado and beyond for the development and commercialization of renewable energy and clean technologies. Specialists at the law firm of Brownstein Hyatt Farber Schreck and Colorado Energy News are providing information on the types of projects funded by the federal and state governments, the various funding instruments used, private companies’ input to public agencies for clean tech support, trends in the public support of clean technology, and funding awards. We hope you find the information presented in this special section helpful to your organization’s knowledge base and future growth.

DOE and Treasury to Provide $2.3 Billion in Tax Credits for Manufacturers of Advanced Energy Equipment

 DOE and the Department of the Treasury recently announced the implementation of a new tax credit program, known as the Advanced Energy Manufacturing Tax Credit, to award $2.3 billion in tax credits to developers of facilities that manufacture particular types of energy equipment. The program, which was authorized under Section 1302 of the American Recovery and Reinvestment Act (ARRA) and now codified as Section 48C of the Internal Revenue Code, will provide tax credits to “qualifying advanced energy projects” that re-equip, expand or establish a manufacturing facility for the production of certain types of equipment. Qualifying equipment includes solar, wind and geothermal energy equipment, as well as fuel cells, micorturbines, batteries, electric cars, electric grids for renewable energy transmission, energy conservation technologies, and carbon dioxide capture and sequestration equipment.

The program will provide a 30 percent credit of the equipment’s cost for investments in new, expanded or re-equipped manufacturing projects. Credits are available for two years or until the $2.3 billion cap is reached, and projects must be completed within four years of tax credit acceptance. Unlike other kinds of tax credits, this program requires applicants to successfully submit an application to DOE and Treasury in order to receive a credit. Preliminary applications under this program must be submitted to DOE by September 16, 2009, with final applications due by October 16, 2009.

Note that this credit is not for renewable energy generation, but for the manufacturing of renewable energy equipment. The credit applies to both new manufacturing facilities as well as refurbishing or expanding existing facilities, but does not apply to a building or its structural components. To qualifying as a manufacturing facility, the facility must make or process raw materials into finished products, or accomplish any intermediate stage of that process. Additionally, qualifying property eligible for the credit must also be “necessary” for the production of the advanced energy property.

Credits will only be awarded to projects with a reasonable expectation of commercial viability, and DOE and Treasury will choose the projects that they believe will (1) provide the greatest direct and indirect domestic job creation from 2009 to 2013; (2) have the greatest net impact in avoiding or reducing air pollutants and greenhouse gases; (3) have the greatest potential for technological innovation and commercial deployment; and (4) have the shortest project time from certification to completion. DOE and Treasury will also consider technology, geographic and project size diversity, and regional economic development in reviewing potential projects.

Treasury plans to certify or reject applications by January 15, 2010, with awardees receiving acceptance agreements from Treasury by April 16, 2010.
For more detailed information, please visit http://www.energy.gov/recovery/48C.htm 

DOE Issues New Loan Guarantee Solicitations and
Proposes Amendments to Existing Regulations

The United States Department of Energy (DOE) recently released two loan guarantee solicitations and proposed changes to key regulations governing its loan guarantee program.

The solicitations were authorized by Title XVII of the Energy Policy Act of 2005 (EPACT), as amended by the American Recovery and Reinvestment Act of 2009 (Recovery Act). One of the newly-issued solicitations targets renewable energy and energy efficiency (EERE) projects that offer new or substantially improved technologies into the commercial marketplace. The other newly-issued solicitation is directed at transmission infrastructure development projects, authorized under the Recovery Act, that can begin construction before October 2011. Note that an additional solicitation for loan guarantees for conventional renewable energy generation and manufacturing projects authorized under the Recovery Act is still forthcoming.

In a separate but related move, DOE issued proposed amendments to the existing regulations governing its New and Innovative Technologies Program. The proposed regulatory changes would allow more flexibility in DOE’s treatment of collateral under that program to facilitate more creative project financing scenarios for the existing DOE Loan Guarantee Program.

Innovative Technologies (Solicitation DE-FOA-0000140)

This solicitation makes $8.5 billion of loan guarantee authority available for qualifying new and substantially improved EERE technology projects under the existing Section 1703 Program of Title XVII of EPACT. Because this new round will also solicit projects that would be eligible for the new Section 1705 Recovery Act loan guarantee program, this solicitation includes an additional $2.5 billion to pay for the credit subsidy costs for applicants who, in addition to meeting the requirements of the Section 1703 program, also meet the requirements of the new loan guarantee program established under the Recovery Act. Of this $2.5 billion, $500 million is reserved for applicants seeking loan guarantees for “leading edge biofuel projects.”

To be eligible for funding under this solicitation, a project must: avoid, reduce or sequester air pollutants or anthropogenic emissions of greenhouse gases, and employ one or more new or significantly improved EERE technologies.

Given the broad nature of this solicitation, DOE expects a wide variety of applicants. Some of the industry sectors DOE considers potentially eligible for funding include:

♦ biomass
♦ efficient electricity transmission, distribution and storage
♦ geothermal
♦ wind, hydropower and solar
♦ hydrogen and fuel cell technology
♦ energy efficiency projects

Additionally, if a project seeks credit subsidy funding under the Recovery Act, it must fit within one of the following categories:

♦ renewable energy systems, including incremental hydropower, that generate electricity or thermal energy and facilities that manufacture related components;
♦ electric power transmission systems, including upgrading and reconductoring projects; and
♦ leading edge biofuel projects that will use technologies performing at the pilot or demonstration scale that DOE determines are likely to become commercial technologies and will produce transportation fuels that substantially reduce life-cycle GHG emissions compared to other transportation fuels.

Projects must commence construction no later that September 30, 2011 to be eligible.