As of March 1st, the potential impacts of sequestration on the solar industry have unfortunately become reality. On Monday the 4th, the Treasury released a “Message on Sequestration” clarifying its impact on Section 1603 of the American Recovery and Reinvestment Tax Act of 2009, more commonly known as the cash grant for the 30 percent investment tax credit (ITC). Due to sequestration, 1603 awards will be reduced by 8.7 percent, a larger cut than the 7.6 percent we expected to see as of October. The final grant amount for affected projects is now 27.39 percent, not the full 30 percent of the ITC.
Sequestration will affect applicants receiving awards between March 1st and September 30th, 2013. After September, the sequestration rate may be altered subject to congressional action. The date on which the Treasury issues the “Section 1603 Award Letter” to an applicant determines whether or not the grant amount is affected. The date on which the applicant submits an award request to the Treasury is irrelevant. Applicants are reminded to abide by program guidelines in calculating the eligible basis for the project, and are specifically instructed not to alter award claims in an attempt to adapt to the sequestration rate.
Because applicants cannot control when the award letter is issued, Sol Systems expects to see some projects receive unexpected cuts to their cash grant amount. Projects applying for the standard 30 percent tax credit will not be affected.
If you have a project under Section 1603 and are seeking financing, or would like more information on our company, please contact our team at firstname.lastname@example.org or (888) 235-1538 x2. Our team would be happy to discuss your project with you and assess financing opportunities.
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