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Renewable Energy Tax Credits News Briefs - June 2010

The Internal Revenue Service (IRS) has posted an updated Form 4255, Recapture of Investment Credit. The form is used to calculate tax increases for the recapture of investment tax credit claimed on certain types of property including rehabilitation, reforestation, energy, qualifying advanced coal projects or qualifying gasification projects. Updated in March, the form now includes qualifying advanced energy project property as a type of property subject to recapture. The revised form also states that if taxpayers had a credit determined for energy property for any year and in any later year received a grant under Section 1603 of the American Recovery and Reinvestment Act (Recovery Act), they must recapture the energy credit. Form 4255 is available for download at


A report released by the Geothermal Energy Association (GEA) on April 13 demonstrated a 26 percent growth in geothermal projects under development in the United States in 2009, with 188 projects under way that could produce as much as 7,875 megawatts (MW) of power. According to the “April 2010 U.S. Geothermal Power Production and Development Update,” Nevada continued to lead in new geothermal energy, with more than 3,000 MW under development. The fastest growing states were Utah, which quadrupled its geothermal power under development, New Mexico, Idaho and Oregon. The report also documents American Recovery and Reinvestment Act funding in the geothermal industry, which will result in more than $600 million of research into new technology at 135 projects in 25 states over the next two years. GEA noted that all of the geothermal projects that came on line in 2009 used the new federal tax grant provisions under the Recovery Act. View the full report online at


The Solar Energy Industries Association (SEIA) appointed Dan Adamson as its vice president of government affairs. He will oversee SEIA's government affairs operation, including legislative and regulatory activities. Adamson recently advised and represented clients regarding energy and environmental regulation, policy, legislation and litigation as a partner at Davis Wright Tremaine LLP. His prior positions include director of the Office of Energy Projects at the Federal Energy Regulatory Commission and deputy assistant secretary of energy at the U.S. Department of Energy.


In an effort to increase the production and use of renewable energy sources, the U.S. Department of Agriculture (USDA) is accepting until June 30 grant and loan applications under the Rural Energy for America program (REAP). REAP provides funds to agricultural producers and rural small businesses to purchase and install renewable energy systems and make energy efficiency improvements. Eligible projects include wind turbines, solar, geothermal, biomass, anaerobic digesters, hydroelectric, and ocean or hydrogen systems. More information on the application process is available in an April 26 Federal Register notice.


Solar Power Partners Inc. (SPP), an independent solar power producer, announced that it had closed $115 million in financing, including construction debt, term debt, tax equity from US Bank and WestLB AG, and corporate funding to support the company's growth in commercial and utility markets. The financing, expandable up to $215 million, allows SPP to continue to add to its operating project portfolio.


Calif. Senate Bill 401 was signed into law by Gov. Arnold Schwarzenegger on April 12. The bill conforms California state law with federal tax law changes that have been made since 2005. The bill specifically excludes from California taxable income Section 1603 renewable energy tax credit cash grants. The state's Franchise Tax Board confirmed that the new law will be retroactive to grants paid on or after February 17, 2009, and that any renewable energy grant received by a California income taxpayer in 2009 may be excluded on a grant recipient's 2009 state income tax return. However, Section 1603 grant recipients in California must reduce their depreciable tax basis for state income tax purposes by 50 percent of the Section 1603 grant, as in the case of federal law. Questions about the bill can be directed to Stephen B. Tracy, CPA, at (415) 356-8000.

Journal Category:

Renewable Energy Tax Credits



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