Alternative energy projects in the U.S. that were depending on a renewal of a cash grant program as part of their financing package might be facing some disappointment. The new tax cut extension deal struck between the White House and congressional Republicans will not extend the cash grant election in lieu of the 30% tax credit for projects that generate electricity with renewable energy (solar, wind, geothermal).
 
As part of the American Recovery and Reinvestment Act of 2009, developers of U.S. renewable energy plants were given a choice under the cash grant program. They could take a 30% tax credit for the cost of the investment in the plant, or they could opt for a cash grant in lieu of the credit when the plant is placed in service. The cash grant has been a major incentive to renewable energy projects, since there is no need to bring in investors who can use the tax credit, and since the cash grant can come much earlier than the benefit of the tax credit (because the tax credit is not claimed until the tax return for the project is filed, which could be many months after the project is placed in service). The problem is that the cash grant election is scheduled to come to an end on December 31. It was hoped that this cash grant election in lieu of the tax credit would be extended as part of the tax cut extension deal, but this does not appear to be the case.
 
UPDATE: Language extending the cash grant program was included in the Tax Relief, Unemployment Innsurance Reauthorization and Job Creation Act amendment to H.R. 4853, introduced in the Senate last night.  The language can be found in Section 707 of the Bill.
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Photo of Caleb Holmes Caleb Holmes

Caleb’s practice focuses on complex environmental litigation and environmental compliance. Caleb has represented clients in state and federal courts and in administrative proceedings. In his environmental litigation practice, Caleb often represents corporate clients in cost recovery, contribution and government enforcement actions under Comprehensive

Caleb’s practice focuses on complex environmental litigation and environmental compliance. Caleb has represented clients in state and federal courts and in administrative proceedings. In his environmental litigation practice, Caleb often represents corporate clients in cost recovery, contribution and government enforcement actions under Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Caleb has litigated such matters through trial and has also helped clients negotiate and settle matters. He has worked with clients on cases involving a wide variety of contaminants, including but not limited to PCBs, PFAS, and dioxins. Caleb also has broad experience litigating complex commercial litigation, including products liability and mass tort/toxic tort matters. He has a depth of experience with all aspects of discovery, including work with experts, taking and defending depositions, motion practice, trial preparation and settlement negotiation.

Caleb provides practical advice to clients in the acquisition and disposition of businesses and assets and the re-development of brownfield sites. He works with clients to achieve compliance with state-specific voluntary cleanup programs, including Pennsylvania’s Land Recycling Program (Act 2).

Caleb counsels clients on compliance with a broad range of federal and state environmental laws, including RCRA, the Clean Air Act, the Clean Water Act, and a host of other federal and state environmental laws.

In addition to his legal work, Caleb is active in various professional and civic organizations. He is currently serving as the Council’s Secretary for the Pennsylvania Bar Association’s Environmental and Energy Law Section.