The U.S. Department of the Treasury and the U.S. Department of Energy on Thursday announced that an estimated US $3 billion will be made available for the development of renewable energy projects around the country and made issued the guidance businesses will need to submit a successful application.

Funded through the American Recovery and Reinvestment Act (Recovery Act), the program will provide direct payments in lieu of tax credits in support of an estimated 5,000 bio-mass, solar, wind, and other types of renewable energy production facilities.

The Recovery Act authorized Treasury to make direct payments to companies that create and place in service renewable energy facilities beginning January 1, 2009.

In previous years, the tax credit has been widely used. It is considered a successful incentive for encouraging the development of renewable energy. In 2006, approximately $550 million in tax credits were provided to 450 businesses.

To expedite implementation of the program, Treasury and Energy have made available the terms and conditions, guidance, and a sample application so that companies can prepare successful applications in advance of the launch of the web based application in the coming weeks – yet another tool designed to facilitate the timely flow of program funds to eligible businesses.

Reaction to the announcement within the renewable energy industry was positive accross the board on Thursday.

“Solar stimulus is ready, set and … coming soon. The Treasury guidelines allow solar developers to prepare formal applications that will be accepted at a later date. Once Treasury begins accepting grant applications, the solar industry will create tens of thousands of jobs and spur investment in the clean energy economy,” said Rhone Resch, CEO of the Solar Energy Industries Association (SEIA).

The American Wind Energy Association (AWEA) also welcomed the announcement from the Obama Administration.

“As with all industry, the economic conditions of the past eight or nine months have held US back. We believe these grants will help get our companies back on track, create more jobs, and balance our electricity portfolio with clean, renewable energy. The implementation of this program for renewable energy will be a welcome boost, just when we all need it,” said Denise Bode, AWEA's CEO.

VA Stimulus Money to Include Renewables

In addition to the guidance being issued for Treasury grants, the Department of Veterans Affairs (VA) is targeting nearly one-quarter of its $1.4 billion in funds from the American Recovery and Reinvestment Act to investments in clean energy generation and energy conservation.

VA will direct more than $68 million to renewable sources, including solar, wind and geothermal energy and has dedicated nearly $238 million toward retrofitting existing buildings to use energy and water more efficiently.

Those efforts, planned for 16 states and Puerto Rico, include solar-powered electricity and hot water energy systems at VA hospitals in Arizona, Texas and southern California; geothermal energy in Idaho; and wind turbines in several states.

To use energy and water more efficiently, facilities are replacing or upgrading windows and roofs; upgrading lighting to more efficient types; automating lighting controls and energy management systems; installing low-flow faucets and toilets and other water-conserving equipment; installing variable-volume air handling units; and enhancing boiler control systems and tune-ups.

"These measures, identified through regularly scheduled energy audits, facility condition assessments, and ongoing monitoring by energy engineers and other staff, are important steps in 'greening' VA," said Secretary of Veterans Affairs Eric K. Shinseki. "In conjunction with the investments in clean energy generation and other green projects that VA is making through its Department-level Green Management Program, these retrofits are key steps in reducing VA's environmental footprint."