Archive for October, 2010

Interpreting Section 1603

Tuesday, October 19th, 2010

There has been a lot of discussion amongst seasoned professionals in the renewable field, as well as, with accountants and attorneys attempting to interpret Section 1603 of the The American Reinvestment and Recovery Act of 2009.  The question remains, what constitutes as 5 percent of the total cost of the project to be completed before year-end 2010 in order to be eligible to receive a cash payment in the form of a grant from the US Treasury versus taking the Solar Investment Tax Credit (ITC)?  Although Section 1603 covers several qualified properties and various procedures, in this case we will focus on solar PV.

Background
Taxpayers who own property eligible for tax credits under sections 45 and 48 of the Internal Revenue Code (IRC) may elect to forego claiming tax credits and instead apply to the United States Department of the Treasury (Treasury) for a cash payment. To do so, taxpayers must place eligible property in service during 2009 and 2010. Property placed in service after 2010 may also be eligible so long as construction began after 2008 and prior to 2011 provided, however, that more than 5 percent of the total cost of eligible property has been incurred, and must be originally placed in service prior its respective credit termination date (i.e. January 1, 2013 for large wind, and January 1, 2017 for solar photovoltaic).

So what does this mean?  As time ticks on and the rush to get eligible projects qualified for the grant before year end, solar integrators look for answers.  Some speculate that you just need to show that you spent 5% of the total project cost in order to be eligible for the grant, others guess that 5% of the physical work must be completed, and still others surmise it should be a mixture of the two.

So what’s the right answer?  Having just returned from the Solar Power International 2010 Conference in Los Angeles (which was amazing btw), I learned that even experts in the industry are unclear of it’s definite meaning, however, I can tell you this:

  • Construction must begin before year-end 2010 (this is not as simple as it sounds)
  • “Physical” work on the specified property must begin and there be a schedule of continuous work in place.  Meaning:  you cannot move some dirt around, drop off a bunch of panels on the site, stage the ground, take some pics, assume you have 5% complete, and call it a day.
  • You must have a concrete plan and schedule of contiguous construction.  If you complete 5% of construction, take off the next 6 months and assume you’re safe, you might be disappointed when the IRS comes back and has you repay the generous grant money you received years prior.
  • In addition to having construction started with a schedule of work in place, you must also have 5% of actual costs paid or incurred by year-end.
  • Don’t think 5% paid and delivery of materials will suffice.  Some suppliers, either out of negligence or in the effort to score business, have offered that this will be enough to qualify for the 5% rule, but this is not the case.  If you are counting on the grant to make your project work for you, be sure to cover all aspects: physical work, schedule of construction and costs paid or incurred.
  • Additionally, the project must also be under a binding rate contract.

If you are planning on applying for the grant to make your project work for you, don’t chance it.  You are already spending a substantial amount of money on your solar investment.  Please seek professional advice from an attorney or accounting firm specializing in this area of expertise.  I retrieved the above information during a seminar, where Ms. Laura Ellen Jones from Hunton & Williams, LLP based out of Richmond, VA, answered the question regarding Section 1603.

Joeseph Di Fiore 8/27/1980 – 9/26/2010

Monday, October 4th, 2010

For those who have been fortunate enough to have met Mr. Joe Di Fiore, I’m sure all would agree that there aren’t enough words in our language to describe him. Only reminiscent stories have attempted to paint a picture of the magnitude in which he has touch so many lives.  And each story is sure to make you laugh uncontrollably or stare in disbelief with your mouth wide open uttering “Oh my God”. When Joe did something, he did it big.  He never held back, never cared what anyone thought, was deceivingly intelligent, deep, thoughtful, giving and a master lyricist…especially when it came to come-backs.

The world lost one of the most incredible souls to touch mine and a multitude of others’ lives last Sunday, September 26, 2010, almost one month after his 30th birthday.  There wasn’t a time I spoke to Joey that I didn’t have a beaming smile on my face, laugh inappropriately, or freeze in shock from whatever he just said.  If I was in a bad mood and heard from Joe, suddenly..life wasn’t as serious and there was nothing to be upset about.  His enthusiasm, charism, and sense of humor could turn the most brittle heart soft and in incidences where his remarks should warrant a smack and revocation of frequent flyer miles…he would receive free drinks for himself and his six accompanying passengers on the plane.  His brother Mike said it best in his eulogy, “when our mother heard of Joey’s death she yelled ‘Joey’s not suppose to die!’, and that’s what Joey always did, exactly what he’s not suppose to do.”

This tells me Joey has a greater plan at work.  He was always a few steps ahead of the rest so I’m sure he’s got something good up his sleeve…we just don’t know it yet.

Joey will be deeply missed by all who knew him.  I speak confidently when I say that there is a void in everyone’s heart and soul who had the pleasure of knowing him.  No matter the length of time or space between him and his friends, Joey’s impact runs deep.  His funeral services remained teeming with people and vibrant with energy throughout the three days.  On the day of his funeral, there wasn’t a seat left in the church and standing room was tight.  If I hadn’t known better, I would have thought people were gathering for a sold-out concert or some high in-demand event.  Over 400 people came on Saturday to show their love and mourn the loss of Joe.  And throughout the days of services, when people weren’t crying uncontrollably over their loss, they were laughing hysterically over the accounts in which Joe touched their lives and in celebration of his fun-loving life.  There wasn’t a person in the room without a memorable story of Joe, and in the instance someone shared their experience, we could smile through our tears.

Since it’s impossible to try to make sense of the premature loss of Joey, I’ve come to realize that there is no understanding death. There’s just accepting.  And that’s no attempt to make the healing process sound easy.  I sure as hell know it’s not easy.  But in order to find some peace, we must look for ways to accept that which we cannot change and let go of those whom we cannot live without.  In time, life will reveal the gifts that come with Joe’s passing.  Until then, I give thanks to Joey, thanks for being a part of my life and thanks for showing me a better way to live.

I’d also like to thank Joe’s parents, Mike and Vicky Di Fiore, and Synergy Energy Solutions, where Joe was Director of Operations.  If it weren’t for you, I would have never met the most amazing person to cross my path.

Grieve not…

nor speak of me with tears…

but laugh and talk of me…

as though I were beside you.

I loved you so…

’twas Heaven here with you.

- dedicated by Mike Di Fiore

Look for miracles.