US Treasury Announces Reduction in Section 1603 Award Amounts Due to Sequestration
March 6, 2013
A recent notice posted by the United States Treasury is expected to have a significant impact on the U.S. solar market. On March 4, 2013 the Treasury announced that, due to sequestration, every Section 1603 award made between March 1, 2013 and September 30, 2013 will be reduced by 8.7%, irrespective of when the application was received. The notice indicates that the reduction rate will be applied until September 30, 2013, at which time the sequestration rate is subject to change.
The notice defines “award” as the final decision of the U.S. Treasury to pay a claim as evidenced by the “Section 1603 Award Letter.”
It is important to note that the notice does not mention the Investment Tax Credit, which appears to remain unchanged at this time. Further, the notice does not indicate that the 8.7% that is reduced will be subject to payment at a later date; however, repayment is likely an issue to be discussed during the future sequestration negotiations.
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