Biomass Magazine: Viability Growing Biomass Development

on Dec 07 in Viability in the News

State RPS, Incentives Spur Development
Biomass project development could be expedited in 2010 and coming years, as developers contribute to state renewable portfolio standards and scramble to meet deadlines for funding opportunities.

By Lisa Gibson, Associate Editor
Biomass Magazine, Dec. 2009

The most influential factors for U.S. biomass development in 2010 most likely will be state renewable portfolio standards (RPS), along with financial incentives, perhaps none as effective as the Grants for Specified Energy Property in Lieu of Tax Credits program.

The incentive was established under Section 1603 of the American Recovery and Reinvestment Act and is designed to fill the gap where the Production Tax Credit isn’t useful. It requires the U.S. Department of the Treasury to make a one-time payment to eligible renewable electricity developers in the amount of 30 percent of a project’s qualified capital cost, instead of the production tax credit, which is paid over a 10-year period. Statutory provisions specify that the property must be placed in service during 2009 or 2010. It can, however, be on line after 2010 by a statutory deadline, but only if construction began in 2009 or 2010. Thus, developers who want to reap its benefits are running out of time.

“We’re seeing a lot of biomass projects moving into the preconstruction phase because of the opportunity to get these grants,” says James Bertrand, a Leonard, Street and Deinard shareholder and head of the law firm’s energy group. “It significantly improves the overall financial picture.” The program is less complicated than the tax credits because there is no need for a tax credit investor, he adds…

[Viability is featured at the end of the More Federal Funding section and the beginning of Other Options]

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