Department of Energy Guidance on Qualified Advancement Energy Project Investment Tax Credits
The U.S. Treasury Department and the Department of Energy (“DOE”) last week issued guidance on the requirements for the new Qualified Advanced Energy Project (“QAEP”) tax credits. This program, which was created by the 2009 American Recovery and Reinvestment Act, provides a 30 percent federal income tax credit for investment in property which "re-equips, expands, or establishes a manufacturing facility" that produces renewable energy property. The QAEP credit is contained in Internal Revenue Code (“IRC”) §48C. Unlike most other renewable energy tax credits, a taxpayer wishing to claim the QAEP credit must be allocated an amount of credit by the Treasury Department, acting in consultation with DOE. The total amount of QAEP credit available for allocation is limited to $2.3 billion. The first round of allocations begins August 14, 2009 for 2009-2010. If less than $2.3 billion of credits are issued in the first round of allocations, an additional round of allocations will be made for 2010-2011. To qualify for an allocation of QAEP credit in the first round, a taxpayer must submit an application to DOE by September 16, 2009. Once DOE approves and assigns a rank to the project, an application must be submitted to the Internal Revenue Service by December 16, 2009. The first round of allocations is slated to be made by January 15, 2010.