To help monetize the ITC, ARRA enables taxpayers (that are otherwise eligible to claim the ITC) to elect to receive a cash grant from the U.S. Treasury Department instead of claiming the ITC. To qualify, the project must be placed in service during 2009 or 2010 or, if construction began in 2009 or 2010, before January 1, 2013. The grant is not available to any governmental agency, tax-exempt entity, or rural electric cooperative. Applications must be submitted before October 1, 2011. These grants generally function the same way as the ITC. The amount of the grant generally is 30% of most of the cost of the facility. A grant is not included in the taxable income of the recipient, but the tax basis of the facility is reduced by one-half of the amount of the grant. The Treasury Department must pay the grant by 60 days after the later of: (a) the date of the application or (b) the date the facility is placed in service. ARRA contains a specific provision appropriating “such sums as necessary” to make sure that funds will be available to pay grants on all qualifying projects.
Benson, David, Greg Jenner, and Debra Frimerman. SHOW ME THE MONEY: The Law Of The Stimulus Package. 2009.