Former coal lobbyist Glenn Schleede plays Don Quixote, crusading against the DOE's 20-year initiative to boost investment in windmills.
A renewable incentive expires with the Treasury grant program.
e.g., a master contract) entered into before the manufacture of the property. The developer then may assign its rights to certain units of property to an affiliated special purpose vehicle—generally, a limited liability company—that will own the project for which such property is to be used and will apply for the grant payment. Costs paid or incurred with respect to the master contract are considered to have been paid or incurred in 2009 or 2010 for purposes of determining whether construction has started. For purposes of determining whether construction has started, these costs are treated as costs of the property notwithstanding the assignment of all or a portion of the contract to the developer’s affiliate.
To satisfy the 5-percent safe harbor, applicants must demonstrate that costs paid or incurred before the end of 2010 are equal to, or greater than, 5 percent of the actual total costs of the specified energy property. However, if the applicant’s project includes multiple units of specified energy property, an applicant can opt to apply for a grant based on some, but not all, units of property.
Process and Documentation
All applications for section 1603 grants must be submitted by the statutory deadline of Oct. 1, 2011. For property that has been, or will be, placed in service in 2009 or 2010, an application demonstrating that construction has begun isn’t required. For property that’s placed in service after Dec. 31, 2010, but before Oct. 1, 2011, applicants need only submit a single application demonstrating both that construction began on the property in 2009 or 2010 and that the property has been placed in service. For property that’s placed in service on or after Oct. 1, 2011, applicants must submit a preliminary application by Oct. 1, 2011, demonstrating that construction on the property began in 2009 or 2010. Such applications then must be supplemented at the time the property is placed in service.
If an applicant submits an application demonstrating that construction has begun, the IRS will notify the applicant whether or not the work performed is physical work of a significant nature or, for applicants relying on the safe harbor, whether qualifying costs have been paid or incurred. However, the IRS can’t provide assurance that an applicant meets all the requirements for a payment until all facts and circumstances are known ( i.e., at the time the facility is placed in service).
For projects relying on physical work of a significant nature, applicants must document the physical work. For example, to demonstrate that physical work of a significant nature has commenced at the site, applicants should submit a written report from the project engineer or installer, signed under penalties of perjury, describing the project’s eligibility; including a detailed construction schedule; estimated budget for the project; and a description of the work that has commenced, including any invoices for the work performed.
For projects with an anticipated cost basis of $1 million or more, the report must be from an independent engineer. To demonstrate that physical work of a significant nature has commenced under a binding written contract,