The 12 projects in eight states, which otherwise would have qualified for tax credits, will receive cash in lieu of the tax breaks. Ten of the projects are for wind power, the other two are solar. The program, authorized under the 2009 American Recovery and Reinvestment Act, is designed to give companies a cash infusion at a time when credit is tight and fewer investors are supplying startup funds, despite such tax breaks.
There is no financial cap on the program because it is being used to offset the existing tax credits, but Treasury officials expect it will cost about $3 billion.
"There's no competition for these payments. All eligible applicants with eligible projects will receive funding," said Dan Tangherlini, assistant secretary for management at Treasury.
Tangherlini said he expects companies will use the awards to make investments that will create new jobs, although funds could be used for anything the awardees wish, including to pay dividends to shareholders.
The first 12 awards likely are among the largest, said Matt Rogers, the senior adviser for Recovery Act implementation at the Energy Department. The largest of the awards, $114 million, went to the 84-turbine Penascal Wind Farm in Texas, which generates electricity for San Antonio and the surrounding area. Other projects are in Colorado, Connecticut, Maine, Minnesota, New York, Oregon and Pennsylvania.
Companies seeking the awards must apply first to the Treasury Department, which then will forward applications to the National Renewable Energy Laboratory for final approval.
"While the initial focus is on wind and solar, the breadth of technology in the applications in the pipeline is really quite attractive," Rogers said.
"The 12 projects highlighted today comprise 840 megawatts of energy -- that's a 3 percent increase in renewable energy capacity just from this group," he said. "I think that shows the power of this program to stimulate investment in this area." According to Rogers, the projects are expected to generate 2.3 billion kilowatt hours and avoid 1.4 million tons of [carbon dioxide] emissions annually.
"We have quite an attractive group of projects today and an even more attractive group of projects behind this in the pipeline," he added. Treasury will accept applications for the grants through Oct. 1, 2011.