Are Solar Projects in Puerto Rico Eligible for 1603 Funding?

Dear Clark,

Thanks for your question. While we are unable to answer specific legal questions online without knowing more details about your specific project, we can certainly provide some general information about the 1603 funding guidelines and the other issues you raised.

First, you are right to be concerned because as a general rule, to be eligible for Section 1603 grant funding, the property must be used predominantly in the United States.  However, there is an exception to this general rule which says that if a property is described in the Internal Revenue Code (IRC), section 168(g)(4) which includes property owned by a domestic corporation or U.S. citizen that is used predominantly in a U.S. possession (including Puerto Rico).

To be eligible, the corporation must also not have an election in effect under section 936 of the IRC and the U.S. citizen must not be entitled to the benefits of section 931 or section 933 of the Internal Revenue Code.

In other words, with a few exceptions, renewable energy projects in Puerto Rico should be eligible for funding under the 1603 program.

As for the RCRA issues, there doesn’ t seem to be any indication that contaminated land is ineligible for the 1603 grant. In fact, there are a number of innovative incentive programs offered to encourage renewable energy projects on polluted land. Have a look at EPA’s website for further suggestions and information.

Please feel free to be in touch if we can be of further assistance with your application: questions@cleantechlawpartners.com or visit us online: Cleantech Law Partners.

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