U.S. ready to issue grants for renewable energy

WASHINGTON (Reuters) - The U.S. government on Friday said it is now accepting applications for some $3 billion in government grants to boost development of renewable energy projects around the country.

Wind turbines stand tall on a farm in Lowville, New York, August 24, 2006. REUTERS/Mark Dye

The money, from the economic stimulus package, will provide direct payments to companies in lieu of tax credits to support an estimated 5,000 biomass, solar, wind and other renewable energy production facilities. Projects must begin construction this year or in 2010 to get the grants.

The Treasury and Energy Departments announced the funding guidelines earlier this month. Each project is expected to receive an average of $600,000, but there is no cap on how much a company can get or a limit on the total funds that will be available.

“This program will play a major role in encouraging private sector capital to invest in clean energy development, creating new jobs that can’t be outsourced,” Energy Secretary Steven Chu said in a statement.

“It is an investment that will continue to help our economy grow and ensure advancement in clean and renewable energy development,” he added.

President Barack Obama has promoted development of clean energy as a way to jump start the lagging economy. He has pledged to double renewable energy production in three years.

Previously energy companies could file for a tax credit to cover a portion of the costs of a renewable energy project. Under the new program, companies would forgo the tax credits in favor of an immediate reimbursement of 30 percent of certain project expenses, making funds available quickly.

The government plans to have checks deposited into a company’s bank account within 60 days after receiving an eligible application.

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Reporting by Ayesha Rascoe; Editing by Marguerita Choy