President Signs 2010 Tax Bill into Law: Renewable and Other Energy Provisions Extended

On December 17, 2010 President Obama signed into law H.R. 4853 which extends the "Bush" era tax cuts for all taxpayers, at every income level for two additional years. Many energy provisions were also included. One of the timeliest provisions is the extension of the law passed in the American Recovery and Reinvestment Act of 2009 enacting Section 1603 Grants.

Section 1603 Grant in Lieu of Investment Tax Credit:

The existing law, under ARRA Section 1603, allows a taxpayer to elect to have certain property which is part of a qualified renewable electricity production facility qualify for a cash grant in lieu of the investment tax credit. In most cases the grant amount is 30 percent of the basis of the qualified property. The previous law required eligible property to be placed in service in calendar years 2009 or 2010, or at a minimum to have begun substantial construction or have met a 5% safe harbor test during that period.

The new law extends the Treasury Secretary's authority to provide grants in lieu of credits for one year (through 2011). The new law provides that eligible property must be placed in service in calendar years 2009, 2010, or 2011, or for property placed in service later, its construction must begin during that period. The extension provided by the new legislation does not extend the deadline to have the qualified projects completed, which relates to the expiration of the underlying tax credits for these types of properties. The qualified projects must still be completed prior to 2013 (in the case of wind facility property), 2014 (in the case of other renewable power facility property eligible for credit under Section 45), or 2017 (in the case of any specified energy property described in Section 48). The grant application due date has also been pushed back a year. Applications must now be filed before October 1, 2012.

The Section 1603 Grant in lieu of credit program has been popular among those who are not able to benefit from a tax credit, and has served to provide a much-needed source of funding during the financial system's challenges over the past two years. The extension is a welcome development for investors and developers of renewable energy projects.

Other alternative energy points of interest pertaining to the passage of the 2010 Tax Bill include:

•  100% Bonus Depreciation: 100% bonus depreciation applies to new assets acquired and placed in service starting September 9, 2010 through December 31, 2011.  The 50% depreciation structure will again apply for 2012. These accelerated depreciation provisions can enhance the tax benefits when investing in renewable energy projects.

•  NOT INCLUDED - Advanced Energy Manufacturing Tax Credit (48C): The first $2.3 billion of credits were designed to jump-start domestic manufacturing of renewable energy components. Unfortunately, even with allocation support from President Obama, the new tax law did not extend this program. 

For more information on the Section 1603 Grant or other alternative energy provisions please contact a member of the Baker Tilly Renewable Energy and fellow WI Wind Works Alliance Member: 

Rich Frohmader: 608 240 2340

richard.frohmader@bakertilly.com

Sam Blahnik: 608 240 2464

sam.blahnik@bakertilly.com

  

Visit: www.bakertilly.com/Renewable-Energy

State Awards $8 Million in Renewable and Wind Energy Funding

The Milwaukee Metropolitan Sewerage District and Price Engineering Co. have received a combined $8 million to invest in their operations through the State Energy Program. 

Price Engineering which is establishing a wind-turbine service facility in Hartland, received $3 million from the state.

Price Engineering will provide maintenance services and repairs for wind-turbine gear driven systems. The funds will be used to buy equipment for the gear-driven remanufacturing plant. The plant will include material handling, testing capabilities, and a gear-drive spares-management process to ensure replacement of worn gear boxes in turbines.

The project will create 111 jobs and represents a total investment of $9 million according to the Commerce Department. 

Five million dollars was granted to the Milwaukee Metropolitan Sewerage District (MMSD) through the State Energy Program. 

MMSD plans to use the funds to purchase turbines capable of burning landfill gas. The gas will be converted into electricity and used in the manufacturing process. The total cost for the project is said to be $88 million. 

The American Recovery Reinvestment Act is funding the State Energy Program. Currently Wisconsin is the only state directing 100 percent of its state energy funds from the act to help manufacturers bring down their costs through energy efficiency and renewable energy projects.

City of Neenah Considers Wind Power

The city of Neenah’s Common Council has been convinced by proponents of renewable energy to budget $250,000 next year to build either a system based on solar or wind turbines at the city garage.

The project would generate 50,000 kilowatt hours of energy annually or 25 percent of the electrical need of the Tullar Road garage.

The project would be funded through the city by borrowing $100,000 and drawing $150,000 from cash reserves. Proponents are anticipating $100,000 from WE Energies— $50,000 from Focus on Energy and $150,000 from financial incentives.

The electrical cost at the city garage total about $20,000 per year, it is predicted that the system would be able to cover around 25 percent annually or $5,000 per year. The payback period for the system would be 20 years.

Ald. John Ahles, co-chairman of Sustainable Neenah urged the council to not forget about the educational and environmental benefits of the project. “It will help educate this council, and will help educate future councils.”

In a discussion over using solar or wind power deputy director of community development, April Mielke stated the Sustainable Neenah Committee favors wind power for the project because it would be more visible. “Wind was something we felt that would be more identifiable to the public and something that would be a daily symbol of the efforts towards sustainability.”

Scientist Says Wind Turbines May Aid Crops

New research by an Iowa State University scientist reveals that wind turbines could be beneficial to adjacent crop fields.

ISU professor of geological and atmospheric science, Gene Takle, believes that wind turbines may help crops grow healthier and faster by moderating ground level temperatures, in turn blowing away fungi-producing moisture and churning the air to expose plants to more growth-promoting carbon dioxide.

Last week Takle presented the findings at a meeting of the American Geophysical Union in San Francisco.

"When people think about wind turbines they think of four things birds, bats, noise and radar interference," said Takle. "They really don't consider impacts on the environment."

But Takle and University of Colorado researcher Julie Lundquist did just that.

Last summer Takle collected surface measurements of temperature, wind fluctuation and changes in carbon dioxide from fields adjacent to wind turbines. Lundquist then used a laser to determine that wind turbines create a plum of turbulence that can be measured up to 250 feet and a quarter of a mile down wind.

The next step in research is to quantify any impacts the turbines have on crop growth, said Takle.

Takle said he began look at whether turbines affect crop growth because of what he already knew about the impacts of shelter belts. Shelter belts are rows of trees that farmers plants in order to be used as wind breakers.

Takle believes that a turbines effects are the greatest in the spring and fall because they would keep crops warmer and prevent frost.

Air movement would also limit the amount of dew forming on crops which in turn would lower the chances of fungi and toxins to grown on the crop.

Lastly, extra turbulence produced from the turbine could lift carbon dioxide from the soil and make it easier for crops to absorb more of it, enhancing a plants ability to perform photosynthesis and grow.

Wind Turbine Foundation and Tower System Design Course Available Feb. 22-23rd

For those interested in training opportunities for Wind Turbine Foundation and Tower Design a course will be held February 22-23^rd in Santa Clara, California.  Attendees will:

-Develop design know-how in this rapidly developing area

-Gain in-depth understanding of the mechanics and principles of structural tower loads on foundations

-Become a valuable, contributing member of your company’s design team

-Gain working knowledge of the design of shallow through deep foundation systems for wind turbines including ground improvement

Instructors include skilled professionals from Vestas Technology, Con Tech Systems, Ltd., Renewable Energy Systems Americas, Inc., Earth Systems Global, Inc, and the University of Wisconsin Madison. 

Download the brochure and register here: http://epdfiles.engr.wisc.edu/pdf_web_files/epd/L771.pdf

Tillsonburg Selected by Siemens for Turbine Plant

Siemens has recently announced that Tillsonburg, Canada will be the home of a new wind turbine blade manufacturing facility. Siemens expects to invest more than $20 million into the project.

The creation of the facility is expected to create 300 jobs along with 600 related jobs during the construction process.

On hand to help with the announcement was Brad Duguid, Ontario's Energy Minister who said, "I've had the opportunity in the last seven day to announce 1,700 clean energy jobs across the province. That's something."

The blade factory will be located in an existing 253,000 sq. ft facility. The factory will be the first manufacturing plant for wind turbine parts in Canada.

Rene Umlauft, CEO of Siemens Renewable Energy said in a press release, "By investing in a new blade production facility in Canada, Siemens is pushing further ahead with the regionalization of its wind manufacturing network in important markets." Umlauft continued stating, "Canada is one of the Top 10 wind power markets in the world by installed capacity."

Currently Siemens has eight projects commissioned or underway in Ontario and Manitoba.

In 2009 Canada saw wind power capacity climb by 40 percent, providing enough electricity to power more than one million homes. Canada's wind power capacity is expected to continue to climb providing enough electricity for 11 percent of the country's total power generation by October 2020.

Renovations to the Tillsonburg facility will begin in late December, and it its expected to be ready for production by October 2011.

Alternative & Renewable Energy Tax News Alert

On Thursday evening Mark Baucus, Senate Finance Committee Chairman released a proposed tax legislation the "Middle Class Tax Cut of 2011," which would include permanent extensions of Bush-era tax cuts of house holds with incomes less than $250,000, changes to the estate tax, and a variety of additional business tax extensions. Developers and investors in new energy technologies are particularly int rested in proposed legislation that would renew several expired or expiring tax provisions.

For more information regarding the "Middle Class Tax Cut of 2011" click here.

Broadwind Energy to Provide Towers for Wisconsin Wind Farm

Illinios based Broadwind Energy recently revealed that its Wisconsin-based subsidiary, Tower Tech Systems will supply the Glacier Hills Wind Park project located in Central Wisconsin.

The wind farm is being developed by WE Energies with the design and construction services being provided by a partnership between the Boldt Company and Michels Corportaion.

Construction of the project began in May of this year with expectations of the turbines being installed "in the very near future."

Vestas will be manufacturing the turbines for the Glacier Hills Wind Park project and believes the turbines are capabile of generating enough power to supply up to 45,000 homes with electricity.