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Recovery Act

1603 Program: Payments for Specified Energy Property in Lieu of Tax Credits

The purpose of the 1603 payment is to reimburse eligible applicants for a portion of the cost of installing specified energy property used in a trade or business or for the production of income. A 1603 payment is made after the energy property is placed in service; a 1603 payment is not made prior to or during construction of the energy property.

Attention: September 30, 2014
Message on Sequestration​



Deadlines

THE DEADLINE FOR SUBMITTING NEW APPLICATIONS HAS EXPIRED.

Pending Applications – If you submitted an application prior to October 1, 2012 for energy property not yet placed in service (known as a Begun Construction application) you must update to a Converted Application within 90 days after the energy property is placed in service.   This 90 day time period may be extended for an additional 90 days (you can obtain this extension, while updating the application, at any time prior to the expiration of 180 days from the placed in service date).  You do not need to wait for a response from Treasury on your Begun Construction application.  Applications updated after 180 days of an energy property being placed in service will not be accepted.

 

FAQs – General

These are  FREQUENTLY ASKED QUESTIONS about the 1603 program and their answers.

Converted Applications – for energy property placed in service after September 30, 2012 but construction began in 2009, 2010, or 2011.  A Begun Construction application must have been submitted before October 1, 2012.   A Converted application is a Begun Construction application that has been updated after the energy property is placed in service.

  1. ​Read the GUIDANCE,  TERMS AND CONDITIONS, and SAMPLE APPLICATION.
  2. If you do not already have one, request a DUNS number by calling 1-866-705-5711. This is needed to complete section 3A of the application.
  3. Gather all of the documentation needed to complete section 6A of the application. Print the APPLICANT CHECKLIST to ensure you have all the required documentation.
  4. Complete the on-line Converted Application by clicking on the Application Control Panel of the online system at https://treas1603.nrel.gov/.  You must have the Treasury Application Number (TAN) you received at the time the Begun Construction application was submitted.  Sign the Terms and Conditions at https://treas1603.nrel.gov/.​      
  5. Register with the System for Awards Management (SAM) at https://www.sam.gov/portal/public/SAM/. The SAM registration must be completed and active before a payment can be made.​

For energy properties placed in service having a cost basis in excess of $500,000, an applicant must submit an ACCOUNTANT’S CERTIFICATION with their application in section 6A.

Assignment of Payment to a Financial Institution

An applicant has the option of assigning the 1603 payment to a financial institution. This means that the 1603 payment does not go into the applicant’s account, rather it goes to the financial institution itself (perhaps for repayment of the construction loan). The 1603 payment cannot be assigned to an installer, contractor, or other non-financial institution.

For information on assigning a 1603 payment to a financial institution, click on these links:

FAQs – Begun Construction

For energy properties not placed in service in 2009, 2010, or 2011, an eligibility requirement of the 1603 program is that construction of the energy property must begin in 2009, 2010, or 2011. These are FREQUENTLY ASKED QUESTIONS and answers about how to meet this requirement.

Accountant’s Report for Begun Construction – 5% method and basis of $1+ million

An applicant may qualify as having begun construction by satisfying either the “physical work” or “5% of costs” method or both. These are described in the Guidance and FAQs.

For projects relying on the 5% of costs method and having a cost basis of $1 million or more the applicant must submit (in addition to other documentation described in the Applicant Checklist) a report from an independent accountant on the eligible costs of the energy property paid or incurred by December 31, 2011. This report may be in the form of one of the following:

  • An Agreed-Upon Procedures (AUP) Report prepared by an independent accountant in accordance with AT Section 201, “Agreed-Upon Procedure Engagements” of the AICPA
  • An Examination Report in accordance with AT Section 101, “Attest Engagements” (Statements on Standards for Attestation Engagements 10, as amended) of the AICPA

INSTRUCTIONS AND EXAMPLE FINDINGS for the AUP Report are provided.

For the Examination Report any format that follows AT Section 101 and includes the required information in the BEGUN CONSTRUCTION APPLICANT CHECKLIST is acceptable.

Annual Report

In signing the Terms and Conditions (#5), an applicant agrees to submit a performance report for five years.  A report is due annually, 21 days after the anniversary of the date the energy property was placed in service.  Applicants receive a reminder notification via email 30 days before the report is due. 

  1. Read the SAMPLE ANNUAL REPORT.  (Note: The annual report form has changed – see below.)
  2. Read RECOMMENDATIONS FOR ANNUAL REPORT PRODUCTION DOCUMENTATION.  (new)
  3. Gather the documentation needed to complete section 4 of the report.
  4. Complete the on-line annual report at https://treas1603.nrel.gov.

Beginning May 13, 2013, the online application-reporting system (https://treas1603.nrel.gov) will have a modified annual report for awardees to complete.  In it, several questions have clarifying text.  There are three additional questions:

  • In section 2, all awardees must answer a question about whether the owner of the energy property has filed for bankruptcy.
  • In section 4, all awardees must answer questions about whether the energy property has stopped producing and any actions taken to resume production.
  • In section 1, awardees who have sold the energy property to an eligible purchaser must upload the written agreement between the awardee and the eligible purchaser to be jointly liable for any recapture.

To assist awardees in documenting production, a list of Recommendations for Annual Report Production Documentation is provided on this website and with the Annual Report in the online application-reporting system.

Online System Guide

For help with using the online system, please refer to the 1603 PROGRAM ONLINE SYSTEM GUIDE.

Questions

You may email questions to 1603Questions@treasury.gov.

Please note that the purpose of the 1603 mailbox is to answer questions regarding how to apply for the 1603 program and complete the annual report.  This includes: how to submit an application and assist with updating an awardee’s contact information.  We also answer general questions regarding applicant and energy property eligibility.  We cannot, however, answer questions that are more appropriately answered by tax accountants, lawyers, and the Internal Revenue Service.  This includes questions regarding what can and cannot be included in cost basis and whether or not certain business structures meet eligibility requirements.  Also, we cannot confirm the eligibility for specific projects.

If you need technical support to up-load documents or other problems with the on-line system, you may email questions to treas1603@nrel.gov.

Evaluating Cost Basis for Solar Photovoltaic Property

The review of applications for a 1603 payment includes a determination as to whether the applicant has properly represented and calculated its cost basis. Here is information on the process used by the 1603 team to EVALUATE COST BASIS and the principles that guide this process.

List of Awards

Here is a LIST OF AWARDS. This list is updated frequently.

Here is a STATUS OVERVIEW​ of the 1603 program that is updated from time-to-time.

Thank you for your interest in the 1603 program.

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Last Updated: 11/13/2014 2:10 PM