The 1603 Grant Program is set to expire on December 31st 2011, prompting a rush of end-of-year installations and a strong industry push to extend the program for another year. The Treasury Department’s, 1603 Program is a 30% grant on the cost of renewable energy systems. The Program was created after the financial crisis in 2008 when it was difficult to find tax equity investors to take advantage of tax incentives like the federal Investment Tax Credit (ITC). In order to qualify for 1603 Grant funds projects must have invested 5% of the cost of the system prior to 12/31/11 or have done “physical work” on the project, prompting a surge in end-of-year equipment purchases and contract negotiations. It’s unclear if the program will be extended and many solar developers are not taking chances. The necessity of the 1603 Grant and uncertainty about its future is the likely culprit responsible for the recent surge in solar installations in NJ despite, the crash in SREC prices from $640 this spring to $225 this month.
This is not the first time that the solar industry has seen a 1603 driven end-of-year rush to go solar. The program was set to expire on 12/31/10, but was extended at the last minute after heavy industry pressure. Visit SEIA for more information on the 1603 Program and how you can support its extension.