In the event the Internal Revenue Service (IRS) determines that a taxpayer's project did not qualify for all or part of a payment under the Section 1603 grant in lieu of energy tax credit program, the excessive amount of the payment is includible in the taxpayer's gross income under §61, notwithstanding §48(d)(3)(A), according to Associate Chief Counsel Memorandum (AM) 2011-004. In the memo, the IRS discusses the federal income tax treatment of the receipt of excessive payments under Section 1603. Among other things, AM 2011-004 says that a taxpayer's basis in a project for which the taxpayer receives an excessive payment under Section 1603 is not reduced by the excessive amount in either the taxable year of receipt or the taxable year of the repayment. Questions about AM 2011-004 can be directed to Tony Grappone, CPA, at (617) 330-1920.

The cost of installing solar photovoltaic (PV) systems declined substantially in 2010, and those steep cost reductions have continued into 2011, according to a Lawrence Berkeley National Laboratory study. In "Tracking the Sun IV: An Historical Summary of the Installed Cost of Photovoltaics in the United States from 1998 to 2010," researchers used project-level data to evaluate trends in the installed cost of grid-connected PV systems throughout the United States. Researchers attributed the cost reduction mainly to falling module prices and non-module costs. To sustain the pace of installed cost reductions on a long-term basis, the report recommended establishing policies aimed at specific cost barriers.

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On the final day of the Department of Energy's (DOE's) Section 1705 loan guarantee program, September 30, the department finalized more than $4.5 billion in loan guarantees for four solar energy projects. The Antelope Valley Solar Ranch 1 project, a 230 megawatt (MW) solar plant in North Los Angeles, Calif., received a $646 million loan guarantee. The project is expected to fund 350 construction jobs and 20 operations positions. Another solar power facility in California, the 550 MW Desert Sunlight project in eastern Riverside County, was approved for $1.46 billion in partial loan guarantees that will be funded by a Goldman Sachs Lending Partners-led investor group. Desert Sunlight, anticipated to be one of the world's largest solar PV plants, will create an estimated 550 construction jobs. Also in California, the 250 MW California Valley Solar Ranch project in San Luis Obispo County received a more than $1.2 billion loan guarantee. That project is expected to fund 350 jobs during construction. DOE also approved Project Amp, which consists of rooftop solar installations on 750 existing distribution buildings in as many as 28 states, for a $1.4 billion partial loan guarantee. The project is expected to create more than a thousand construction jobs within four years. Although the Section 1705 program has expired, DOE said it will continue to actively monitor projects that previously received loan guarantees under that program.

DOE selected Tommy P. Beaudreau to lead the newly formed Bureau of Ocean Energy Management (BOEM). Beaudreau, senior advisor of the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), has been highly involved in the bureau's creation, the department said. BOEM is responsible for energy leasing and planning on the Outer Continental Shelf. More information on BOEMRE's reorganization is available at www.boemre.gov.

BP Wind Energy announced that it will begin constructing a 419 MW wind energy project, Flat Ridge 2, near Wichita, Kan., in the fourth quarter of 2011. Flat Ridge 2 will be situated on a 66,000-acre site and will use 262 General Electric wind turbines, each with a 1.6 MW capacity. The company has entered into a long-term power purchase agreement (PPA) with Associated Electric Cooperative Inc. (AECI) for 314 MW generated by the wind farm. The company says Flat Ridge 2 when complete in 2012 will be the largest wind farm in Kansas.

SunPower Corp. expects to start construction on the 25 MW McHenry Solar Farm in Modesto, Calif. before the end of the year. During construction, the project is expected to create as many as 144 construction jobs and inject approximately $18.7 million into the local economy. The solar farm is slated for completion by the second half of 2012.

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