Clean Renewable Energy Bond Program Revived for 2009
Friday, October 24, 2008
Congress has approved an additional $800 million in authorization for the popular Clean Renewable Energy Bond (CREB) program as part of its comprehensive financial restructuring bill. This $800 million represents the total value of bonds that can be issued under this program, not the value of the tax credits themselves.
CREBs are a special type of bond, known as a “tax credit bond,” that offers cooperatives the equivalent of an interest-free loan for financing qualified clean energy projects for a limited term.
The new CREBs program allocates the $800 million equally (33 1/3%) among the three eligible sectors: units of state and local government, municipal/public power and electric cooperatives. In the previous rounds, there was a set-aside for electric cooperatives. In addition, funding was allocated to all eligible projects on a “smallest to largest” basis. In practice, this resulted in the largest projects being shut out from the funding.
For muni/public power projects, the 33 1/3% share will be equally shared by all qualifying projects proportionate to the amount they requested. For example, if one project represents 10% of the total allocation requests, then it will receive 10% of the allocation available for all public power projects.
For electric cooperative and other governmental projects, Treasury can elect any other allocation methodology it chooses but will likely continue to use the smallest to largest approach.
The other significant change in the new program is that purchasers of these bonds will receive only a credit equal to 70% of the statutory credit value. This was re-calibrated in part to reflect that principal repayment of the bond can now be in a balloon payment rather than equal installments.
No application dates or application requirements have yet been posted by the Department of Treasury. Check back at Cleanenergybonds.org for further updates.
November 29th, 2008 at 5:08 am
We seek $50 million in financing for two new manufacturing facilities that will manufacture integrated solar roofing in the USA. It will create about 500 new manufacturing jobs and about 1,000 installation jobs.
February 16th, 2009 at 7:16 pm
Unforunately CREBs are only for municipal utilities, rural electric cooperatives and other public power entities. Perhaps there are other financing measures available through other federal programs.
March 8th, 2009 at 9:43 pm
Check out page 514 of the stimulus package for Industrial Development Bonds,
and p. 547 for Build America Bonds but also be aware of the Buy American provisions at p. 429 or you could disqualify your funding.
http://finance.senate.gov/sitepages/leg/LEG%202009/020209%20complete%20legislative%20text%20of%20American%20Recovery%20and%20Reinvestment%20Act.pdf