The new Clean Renewable Energy Bond (CREB) program provides "tax-credit" bonds to renewable energy projects across the U.S. Unlike typical bonds, which pay interest to the bondholder, the new tax-credit bonds will provide bondholders a credit against their federal income tax.
Section 1303 of the Energy Tax Incentives Act of 2005 (Title XIII of the Energy Policy Act of 2005), authorized the Treasury Secretary to allocate $800 million in CREBs to qualified renewable energy project developers. Under the terms of Internal Revenue Code Section 54 , only state and local governments and municipal and cooperative utilities were eligible to apply for the funding. Potentially qualified types of projects include wind facilities, closed loop biomass facilities, open loop biomass facilities, geothermal or solar facilities, small irrigation power facilities, landfill gas facilities, trash combustion facilities, refined coal production facilities and certain hydropower facilities.
According to the recent IRS press release, the 610 projects authorized to use the bonds were selected from 786 separate applications. Privacy rules prohibit the IRS from disclosing the specific projects authorized to use CREBS at this time, but the IRS reports:
Projects for the governmental borrowers will receive allocations in 24 states and projects for the cooperative borrowers will receive allocations in 22 states. The allocations for the governmental borrowers range from $23,000 to about $3.2 million and for the cooperatives ranged from $120,548 to $31 million.IRS Bulletin 2006-10, issued last March, provides additional background on the CREB program. Energy Efficiency and Renewable Energy Network also has a report on CREBs.
Of the approved projects for the governmental borrowers, 401 are for solar facilities, 99 for wind facilities, 23 for landfill gas facilities, eight for hydropower facilities and one for an open loop biomass facility. Of the projects approved for the cooperatives, 33 are for solar facilities, 13 for wind facilities, 13 for landfill gas facilities, 12 for open-loop biomass facilities, six for hydropower facilities and one for a refined coal production facility.