David Burton Comments on Treasury Cash Grant Applications
David Burton, a partner in the firm’s tax practice, commented in a recent article in North American Windpower on reports that the Department of the Treasury is processing cash-grant applications for solar and wind developers at amounts that are significantly lower than requested.
Burton notes that the Treasury Dept. has not updated cash-grant guidelines since mid-2011, but that the feeling in the industry is that Treasury is indeed applying new rules to cash-grant applications. Whether the new standards are a response to political pressure or simply a different interpretation of existing law and guidance “is not clear,” according to Burton.
The end-result is that developers may be more skittish about relying on cash grants, which could drive even greater demand for already-scarce tax-equity investment. Burton notes, “Changes midstream in programs which have been relied upon by investors and developers are never welcome, and we could see a number of these reductions being questioned or challenged by developers before the U.S. Court of Claims.”