Tick Tock, the Clock Runs Out on the 1603 Cash Grant
If you are still getting ready for New Year's, you may want to think about putting up your solar panel system before the clock runs out on the 1603 cash grant program, which expires with the revelry on Times Square Saturday at midnight. The good news is that you need not complete your 125 kilowatt system before the stroke of midnight, you just need to get started. And If you really are waiting until Saturday morning to start your solar energy system, you'd better stop shopping and talk with your accountant or lawyer. But for most of us, the window of opportunity for this major driver in the growth of the solar energy industry will expire.
There has been an intensive lobbying effort by the Solar Energy Industries Association (SEIA) to include an extension to 1603 in the bill for the payroll tax extension, unemployment insurance benefits and Medicare, but it was not included. The cash grant provides a 30% cash payment off of the cost of your solar energy system instead of the tax credit. You get your money sooner and you don't need any tax liability. The 30% investment tax credit remains, but the cash grant program, which has been a huge benefit to the solar industry, will disappear.
Writing from the center of sun in the U.S., Palm Springs, California, The Desert Sun reports on the plans for several projects that will come to an abrupt halt once the cash grant program expires. According to the report, one developer has placed two major projects on hold due to the impending loss of 1603.
The Motley Fool calls the cash grant program, "A solar subsidy that actually makes sense." According to the article, "Just as the solar industry is getting off the ground, Congress is putting up another roadblock as we enter 2012. The 1603 Treasury Program . . . has been a great tool for the solar industry and has helped the industry grow to over 100,000 employees in just a few years. But in the next few days it will expire." And as the article, points out, the cost has been "relatively minimal. As of November, the program had awarded 3,600 grants for a total of $1.5 billion, supporting $3.5 billion in private investment." The article concludes that, "This is one case in which spending now instead of spending later makes a lot of sense."