Section 1603 Treasury Grants were made available to solar and other renewable energy projects in lieu of tax credits by the American Recovery and Reinvestment Tax Act of 2009. In the case of solar property, the Section 1603 Grant is 30 percent of the cost basis of the qualified property. In administering the Grant Program, the Treasury Department has routinely reduced the amount of the Section 1603 Grants paid to applicants below the amounts claimed.
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This paper is intended to highlight best practices, as well as common pitfalls in valuing solar energy projects including the tangible and intangible assets comprising a fully contracted in-place system (a “solar asset”).
The U.S. solar market is increasingly becoming a central focus of global industry attention, but state-by-state differences in regulations, incentives, utilities, and financing structures introduce more complexities in comparison to other markets. As a result, it has long been difficult to track and understand the changing market dynamics for solar energy in the U.S.