There are a variety of state and federal incentives available to companies seeking to develop renewable energy projects in Massachusetts. Several of these incentives have changed over the years. Specifically and most notably is the recent expiration of the Federal 1603 treasury grant (the Grant) in lieu of Investment Tax Credit (ITC). The Grant allowed for the U.S. Department of the Treasury to appropriate funds to qualified applicants installing renewable energy facilities. The Grant was generally equal to 30 percent of the cost of a project and was paid within 60 days of the project becoming operational. Now that the Grant is gone, the question is, are renewable energy projects financially viable?
The answer is yes. There are federal and state incentives available to renewable energy developers, and the cost of solar photovoltaic (PV) modules has decreased significantly over the past year. As a result, the continuing incentives and cost savings make developing solar energy projects in Massachusetts financially viable.
The ITC remains in place in an amount generally equivalent to 30 percent of the eligible cost of the renewable energy facility. However, because the ITC is a tax credit, there are more eligibility limitations associated with it than there were with the Grant. These limitations reduce the pool of eligible recipients primarily to corporations with significant tax liability. Nevertheless, the good news is that (a) the ITC is available to applicants until January 1, 2017 (after which it will be reduced to a ten percent credit), and (b) we continue to work with companies (third parties) willing and able to invest in renewable energy in Massachusetts.
These third-party companies continue to bet on solar in Massachusetts because:
A renewable energy project can be financially viable during a post-Grant era, but it will require a comprehensive understanding of ownership structures, the tax equity players looking to invest in the market, and the incentives currently available in Massachusetts.
If you have questions about any of the information presented here, or want to learn more about renewable energy incentives, please contact Craig M. Tateronis. You can reach Craig at 617 456 8021 or firstname.lastname@example.org.