Qualifying Advanced Energy Project Credit Notice

Part III. Administrative, Procedural, and Miscellaneous
Qualifying Advanced Energy
Project Credit
Notice 2009–72
SECTION 1. PURPOSE
This notice establishes the qualifying
advanced energy project program under
§ 48C(d) of the Internal Revenue Code
and announces an initial allocation round
of the qualifying advanced energy project
credit under the qualifying advanced energy project program. The purpose of the
qualifying advanced energy project program is to encourage taxpayers to re-equip,
expand or establish manufacturing facilities for the production of certain energy related property.
SECTION 2. BACKGROUND
.01 Section 46 provides that the amount
of the investment credit for any taxable
year is the sum of the credits listed in § 46.
That list includes the qualifying advanced
energy project credit.
.02 The qualifying advanced energy
project credit is provided under § 48C.
Section 48C(a) provides that the qualifying advanced energy project credit for
a taxable year is an amount equal to 30
percent of the qualified investment (as
defined in § 48C(b)) for that taxable year
with respect to the taxpayer’s qualifying
advanced energy project (as defined in
§ 48C(c)(1)). The qualifying advanced
energy project credit with respect to any
project for all taxable years may not exceed the amount of credit allocated to the
project under section 5 of this notice.
.03 Section 48C(b)(1) provides that the
qualified investment for any taxable year is
the basis of eligible property that is placed
in service by the taxpayer during such taxable year and is part of a qualifying advanced energy project.
.04 Section 48C(d)(1)(B) provides that
the aggregate credits allowed under the
qualifying advanced energy project program may not exceed $2.3 billion.
.05 Section 48C(d)(3) specifies the
criteria that must be considered in determining which qualifying advanced energy
projects are certified under § 48C(d).

September 14, 2009

.06 The at-risk rules in § 49 and the
recapture and other special rules in § 50
apply to the qualifying advanced energy
project credit. Further, the qualifying advanced energy project credit generally is
allowed in the taxable year in which the eligible property (as defined in § 48C(c)(2))
is placed in service (as defined in section
4.04 of this notice) by the taxpayer. Pursuant to § 48C(d)(2)(C), a taxpayer that
receives a certification under § 48C(d)(2)
has 3 years from the date of issuance of certification to place the qualifying advanced
energy project in service. If the taxpayer
does not place the project in service by the
end of that period, the certification is no
longer valid. The Internal Revenue Service (Service) has no authority to extend
that period.
SECTION 3. ESTABLISHMENT OF
THE QUALIFYING ADVANCED
ENERGY PROJECT PROGRAM
Section 48C(d)(1) provides that the
Secretary of the Treasury or his delegate
(the Secretary), in consultation with the
Secretary of Energy, shall establish a qualifying advanced energy project program to
consider and issue certifications for qualified investments eligible for the credit to
qualifying advanced energy project sponsors. The Treasury Department and the
Service hereby establish the qualifying
advanced energy project program under
the rules set forth in sections 5 through 12
of this notice.
SECTION 4. DEFINITIONS
The following definitions apply for purposes of § 48C and this notice:
.01 Qualifying Advanced Energy
Project. A qualifying advanced energy
project is a project that meets the following requirements:
(1) the project re-equips, expands or establishes a manufacturing facility (as defined in section 4.05 of this notice) for
the production of specified advanced energy property or property that, after further manufacture, will become specified
advanced energy property;
(2) the Service has certified pursuant to
§ 48C(d)(2) that part or all of the qualified

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investment in the project is eligible for a
credit under § 48C; and
(3) the project does not produce any
property which is used in the refining or
blending of any transportation fuel (other
than renewable fuels) (i.e., a qualifying advanced energy project can produce property which is used in the refining or blending of any transportation fuel only if the
property is used solely in the refining or
blending of transportation fuels that are renewable fuels).
.02 Specified Advanced Energy Property. Specified advanced energy property
means any of the following:
(1) property designed for use in the
production of energy from the sun, wind,
geothermal deposits (within the meaning
of § 613(e)(2)), or other renewable resources;
(2) fuel cells, microturbines, or an energy storage system for use with electric or
hybrid-electric motor vehicles;
(3) electric grids to support the transmission of intermittent sources of renewable energy, including property for the
storage of such energy;
(4) property designed to capture and sequester carbon dioxide and sequester carbon dioxide emissions;
(5) property designed to refine or blend
renewable fuels (but not fossil fuels) or
to produce energy conservation technologies (including energy-conserving lighting
technologies and smart grid technologies);
(6) new plug-in electric drive motor
vehicles (as defined by § 30D), qualified
plug-in electric vehicles (as defined by
§ 30(d)), or components that are designed
specifically for use with such vehicles,
including electric motors, generators, and
power control units or;
(7) other property designed to reduce
greenhouse gas emissions as may be determined by the Service.
.03 Eligible Property. Eligible property
is any property (other than a building or
its structural components) that meets the
following requirements:
(1) The property is necessary for the
production of specified advanced energy
property described in § 48C(c)(1)(A)(i) or
section 4.02 of this notice.
(2) The property is:
(a) tangible personal property; or

2009–37 I.R.B.

(b) other tangible property (not including a building or its structural components)
that is used as an integral part of the qualifying advanced energy project.
(3) Depreciation (or amortization in lieu
of depreciation) is allowable with respect
to the property.
.04 Placed In Service. For purposes
of § 48C, property is placed in service in
the taxable year in which the property is
placed in a condition or state of readiness
and availability for a specifically assigned
function. See § 1.46–3(d)(1)(ii) of the Income Tax Regulations. Thus, a qualifying advanced energy project is placed in
service in the taxable year in which the
project is placed in a condition or state of
readiness and availability for its intended
purpose. Eligible property (as defined in
§ 48C(c)(2)) that is a part of the project
is placed in service in the taxable year in
which the property is placed in a condition
or state of readiness and availability for its
intended purpose.
.05 Manufacturing Facilities. For purposes of § 48C, manufacturing facilities
are facilities that make, or process raw
materials into, finished products (or accomplish any intermediate stage in that
process).
.06 Advanced Energy Property Designed To Reduce Greenhouse Gas Emissions. The Secretary may determine that a
property is designed to reduce greenhouse
gas emissions in published guidance or
in the letter notifying a taxpayer that the
Service has accepted the taxpayer’s application for § 48C certification with respect
to the property.
SECTION 5. QUALIFYING
ADVANCED ENERGY PROJECT
PROGRAM
.01 In General. The Service will consider a project under the qualifying advanced energy project program only if the
U.S. Department of Energy (DOE) provides a recommendation and ranking for
the project (DOE recommendation). DOE
will provide a recommendation and ranking only if it determines that the project
has a reasonable expectation of commercial viability and merits a recommendation
based on the criteria in § 48C(d)(3)(B).
Accordingly, a taxpayer must submit, for
each project that it sponsors: (1) a preliminary application and a final application for

2009–37 I.R.B.

recommendation by DOE (application for
DOE recommendation), and (2) an application for certification under § 48C(d)(2)
by the Service (application for § 48C certification). Certifications will be issued
and credits will be allocated to projects
in annual allocation rounds. The initial
allocation round will be conducted in
2009–2010, and if necessary, an additional allocation round will be conducted
in 2010–2011.
.02 Program Specifications.
(1) The Service determines the amount
of the qualifying advanced energy project
credit allocated to a qualifying advanced
energy project at the time the Service accepts the application for certification for
that project in accordance with section
5.02(8) of this notice (see section 6 of this
notice for the requirements applicable to
the application for DOE recommendation
and the application for § 48C certification).
(2) The DOE recommendations will include a ranking of projects in descending
order (that is, first, second, third, etc.). The
project receiving the highest ranking (that
is, first) will be allocated the full amount
of credit requested before any credit is allocated to a lower-ranked project. The
amount of credit allocated to a project reduces the amount of credit available to
lower-ranked projects. The same process
will apply to the second and lower-ranked
projects until the amount available for allocation is exhausted. DOE will recommend
and rank projects only to the extent necessary to exhaust the amount available for
allocation.
(3) If the amount available for allocation is not fully allocated in the 2009–2010
allocation round, a similar allocation round
will be conducted in 2010–2011. The Service will announce the results after the
close of each allocation round.
(4) For each allocation round there will
be an annual application period during
which a taxpayer may file its application
for certification. The Service will consider
a project in an allocation round only if the
application for certification for the project
is submitted during the application period
for that round and the DOE provides the
DOE recommendation for the project.
(5) For the 2009–2010 allocation round,
the application period for certification begins on August 14, 2009, and ends on December 16, 2009. Any completed applica-

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tion for certification submitted to the Service after August 13, 2009, and before December 17, 2009, will be deemed to be submitted by the taxpayer on December 16,
2009.
(6) For the 2009–2010 allocation round,
a preliminary application for DOE recommendation must be submitted by September 16, 2009. A final application for DOE
recommendation must be submitted by
October 16, 2009. If a final application
for DOE recommendation is received on
or before October 16, 2009, DOE will
determine the feasibility of the project and
(for projects determined to be feasible)
provide the DOE recommendation to the
Service by December 16, 2009. See section 6.02 of this notice and Appendix B
to this notice for the information required
to be submitted to DOE in an application
for DOE recommendation. Also, see Appendix B to this notice for a discussion
relating to the process for applying for
DOE recommendation and the instructions
and address for filing the preliminary and
final applications for DOE recommendation.
(7) For purposes of determining the
timeliness of submission of applications,
§ 7502 shall apply in determining the
timeliness of any application for § 48C
certification or DOE recommendation.
(8) For the 2009–2010 allocation round,
the Service will accept or reject the taxpayer’s application for § 48C certification
by January 15, 2010, and will notify the
taxpayer, by letter, of its decision. If the
application is accepted, the date of this letter will be treated as the acceptance date.
(9) If the taxpayer’s application for
§ 48C certification is accepted, the acceptance letter will state the amount of the
credit allocated to the project. If a credit
is allocated to a taxpayer’s project, the
taxpayer will be required to execute an
agreement in the form set forth in Appendix A to this notice. For credits allocated
in the 2009–2010 allocation round, the
taxpayer must execute and return the
agreement to the Service by March 15,
2010, at the appropriate address listed in
section 6.04 of this notice or listed in later
guidance published in the Internal Revenue Bulletin. The Service will execute
and return the agreement to the taxpayer
by April 16, 2010. The executed agreement applies only to the taxpayer who
signed the agreement. Any successor in

September 14, 2009

interest must execute a new agreement
with the Service no later than the due date
(including extensions) of the successor in
interest’s Federal income tax return for the
taxable year in which the transfer occurs.
If the successor in interest does not execute a new agreement, the following rules
apply:
(a) In the case of an interest acquired
at or before the time the qualifying advanced energy project is placed in service,
any credit allocated to the project will be
fully forfeited (and rules similar to the recapture rules of § 50(a) apply with respect
to qualified progress expenditures); and
(b) In the case of an interest acquired after the qualifying advanced energy project
is placed in service, the project ceases to
be investment credit property and the recapture rules of § 50(a) (and similar rules
with respect to qualified progress expenditures) apply.
.03 For qualifying advanced energy
projects that re-equip or expand a manufacturing facility, the taxpayer’s qualified
investment is limited to property that
re-equips or expands the facility to produce specified advanced energy property
listed in section 4.02 of this notice.
.04 The qualifying advanced energy
project credit will not be allocated to a
project with respect to any qualified investment for which a credit is allowed
under § 48, 48A, or 48B, or for which a
payment is received under §1603 of the
American Recovery and Reinvestment Tax
Act of 2009, Division B of Pub. L. 111–5,
123 Stat 115.
SECTION 6. APPLICATIONS FOR
DOE RECOMMENDATION AND § 48C
CERTIFICATION
.01 In General. An application for DOE
recommendation and a separate application for § 48C certification must be submitted for each project that a taxpayer sponsors. If an application for DOE recommendation does not include all of the information required by section 6.02 of this
notice and meet the requirements in sections 8.01 and 8.02 of this notice, DOE
may decline to consider the application. If
an application for § 48C certification does
not include all of the information listed in
section 6.03 of this notice and meet the requirements in sections 8.01 and 8.02 of this

September 14, 2009

notice, the Service will not consider the application.
.02 Information Required in the Application for DOE Recommendation. A
preliminary application and final application for DOE recommendation must
include the information as requested in
Appendix B to this notice.
.03 Information To Be Included in the
Application for § 48C Certification.
An application for certification must include all of the following:
(1) The name, address, and taxpayer
identification number of the taxpayer. If
the taxpayer is a member of an affiliated
group filing consolidated returns, the taxpayer must also provide the name, address,
and taxpayer identification number of the
common parent of the group.
(2) The name, telephone number, email
address, and fax number of a contact person. For such person, attach a properly
executed power of attorney, preferably on
Form 2848, Power of Attorney and Declaration of Representative.
(3) One electronic version on a CD of
the completed application for DOE recommendation submitted with respect to the
project in accordance with section 6.02 of
this notice.
.04 Instructions and Address for Filing § 48C Application. Applications for
certification should be marked: APPLICATION FOR § 48C CERTIFICATION.
There is no user fee for these applications.
Taxpayers may submit their application by
U.S. mail, designated private delivery service (as prescribed in § 7501), or hand delivery (between the hours of 8 a.m. and
4 p.m. Central time, Monday through
Friday) to:
Internal Revenue Service
Industry Director, Natural
Resources and Construction
Attn: Executive Assistant
1919 Smith Street, Floor P2
Stop HOU–1000
Houston, TX 77002
SECTION 7. ISSUANCE OF
CERTIFICATION
.01 In General. Section 48C(d)(2)(B)
provides that a taxpayer shall have 1
year from the date of acceptance of the
§ 48C application during which to provide evidence that the requirements of

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the certification have been met. Section
48C(d)(2)(C) provides that a taxpayer that
receives a certification has 3 years from
the date of issuance of the certification
to place the project in service and that
the certification is void if the project is
not placed in service by the end of that
three-year period.
.02 Requirements for Certification.
(1) Within 1 year from the acceptance
date (as determined in section 5.02(8) of
this notice), the taxpayer must submit to
the Service documentation establishing the
following:
(a) The taxpayer has received all federal, state, and local permits, including environmental authorization or reviews necessary to commence construction of the
project.
(b) The taxpayer has completed all
steps that must be accomplished during
the 1-year period beginning on the acceptance date if the project is to be placed in
service before the end of the 3-year period
beginning on the date of issuance of the
certification (assuming such certification
will be issued on the one-year anniversary
of the acceptance date).
(2) The taxpayer must also comply with
the requirements of sections 8.01 and 8.02
of this notice. The taxpayer should mark
the package, “SECTION 48C CERTIFICATION REQUIREMENTS” and send it
to the appropriate address listed in section 6.04 of this notice or listed in later
guidance published in the Internal Revenue Bulletin.
.03 Service’s Action on Certification.
After receiving the submission described
in section 7.02 of this notice, the Service
will decide whether or not to certify the
project and will notify the taxpayer, by letter, of that decision. If the Service certifies
the project, the date of this letter is the date
of issuance of the certification.
SECTION 8. OTHER REQUIREMENTS
.01 Signature. Each submission under sections 6 and 7 of this notice must
be signed and dated by the taxpayer. A
stamped signature or faxed signature is not
permitted.
.02 Penalties of Perjury Statement.
(1) Each submission under sections
6 and 7 of this notice must be accompanied
by the following declaration: “Under
penalties of perjury, I declare that I have

2009–37 I.R.B.

examined this submission, including
accompanying documents, and, to the best
of my knowledge and belief, all of the
facts contained herein are true, correct,
and complete.”
(2) The declaration must be signed and
dated by the taxpayer. The person signing for the taxpayer must have personal
knowledge of the facts. Further, the declaration must be signed by a person authorized to bind the taxpayer such as an officer
on behalf of a corporation, a general partner on behalf of a state-law partnership, a
member-manager on behalf of a limited liability company, a trustee on behalf of a
trust, and the proprietor in the case of a sole
proprietorship. If the taxpayer is a member
of an affiliated group filing consolidated
returns, the declaration also must be signed
by a duly authorized officer of the common
parent of the group. A stamped signature
or faxed signature is not permitted.
.03 Significant Change in Plans. The
taxpayer must inform the Service if the
plans for the project change in any significant respect from the plans set forth
in the applications for § 48C certification
and DOE recommendation. A significant
change is any change that a reasonable
person would conclude might have influenced DOE in recommending or ranking
the project or the Service in accepting the
project application had they known about
the change when they were considering the
application. Any significant change to the
plans set forth in the applications will have
the following effects:
(1) If the Service is informed of the
change after the date on which the final applications for DOE recommendation were
due for the allocation round under section 5.02(6) of this notice and before the
Service accepts or rejects the taxpayer’s
application for certification under section
5.02(8) of this notice, the Service will not
consider the project during the allocation
round; and
(2) If the Service is informed of the
change after it has accepted the taxpayer’s
application for certification, any allocation
or certification based on that acceptance is
void.
.04 Effect of an Acceptance, Allocation, or Certification. An acceptance, allocation, or certification by the Service
under this notice is not a determination
that a project is eligible for the qualifying advanced energy project credit under

2009–37 I.R.B.

§ 48C or that any property that is part of
the project is an eligible property under
§ 48C(c)(2). The Service may, upon examination (and after any appropriate consultation with DOE), determine that the
project does not qualify for this credit or
that the property is not an eligible property
for purposes of this credit.
.05 No Right to a Conference or Appeal.
A taxpayer does not have a right to a conference relating to any matters under this
notice. Further, a taxpayer does not have
a right to appeal the decisions made under this notice (including the acceptance or
rejection of the application for DOE recommendation or § 48C certification, the
amount of credit allocated to the project,
or whether or not to certify the project) to
any official of DOE or the Service.
SECTION 9. FUTURE ALLOCATION
ROUNDS
.01 2010–2011 Allocation Round. If,
after the allocation round in 2009–2010,
the entire credit under the qualifying advanced energy project is not fully subscribed (that is, the aggregate credit for the
program has not been fully allocated), the
Service will conduct an additional allocation round in 2010–2011. Future guidance
will prescribe the procedures applicable to
applications in the 2010–2011 allocation
round.
.02 Review and Redistribution of Credits. Pursuant to § 48C(d)(4)(A), the Service will review credits allocated under
§ 48C not later than February 17, 2013.
Under § 48C(d)(4)(B), credits available
under § 48C(d)(1)(B) may be reallocated if
(i) there is an insufficient quantity of qualifying applications for certification pending
at the time of the review, or (ii) any certification made pursuant to § 48C(d)(2) has
been revoked pursuant to § 48C(d)(2)(B).
If credits under § 48C(d) are available for
reallocation, § 48C(d)(4)(C) authorizes the
Service to conduct an additional program
for applications for certification. Future
guidance will prescribe the procedures applicable to applications in this program.
.03 Reduction or forfeiture of allocated
credits. Under the agreement set forth in
Appendix A to this notice, the qualifying
advanced energy project credits allocated
under section 5 of this notice will be reduced or forfeited in certain situations. A
taxpayer must notify the Service of the

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amount of any reduction or forfeiture required under the agreement. This notification must be sent to the appropriate address
listed in section 6.04 of this notice or listed
in later guidance published in the Internal
Revenue Bulletin. The amount of any reduction or forfeiture of the allocated credits will be returned and included in the aggregate credit remaining to be allocated in
the 2010–2011 allocation round (if the reduction or forfeiture occurs before that allocation round) and under the procedures
prescribed pursuant to section 9.02 of this
notice (if the reduction or forfeiture occurs
after the 2010–2011 allocation round).
SECTION 10. QUALIFIED PROGRESS
EXPENDITURES
.01 Section 48C(b)(2) provides that
rules similar to the rules of § 46(c)(4)
and (d) (as in effect on the day before the
enactment of the Revenue Reconciliation
Act of 1990) shall apply for purposes of
§ 48C. Former § 46(c)(4) and (d) provided the rules for claiming the investment
credit on qualified progress expenditures
(as defined in former § 46(d)(3)) made
by a taxpayer during the taxable year for
the construction of progress expenditure
property (as defined in former § 46(d)(2)).
.02 In the case of self-constructed property (as defined in former § 46(d)(5)(A)),
former § 46(d)(3)(A) defined qualified
progress expenditures to mean the amount
that is properly chargeable (during the
taxable year) to the capital account with
respect to that property. With respect to
a qualifying advanced energy project that
is self-constructed property, amounts paid
or incurred are chargeable to the capital
account at the time and to the extent they
are properly includible in computing basis
under the taxpayer’s method of accounting
(for example, after applying the requirements of § 461, including the economic
performance requirement of § 461(h)).
.03 To claim the advanced energy
project credit on the qualified progress expenditures paid or incurred by a taxpayer
during the taxable year for construction of
a qualifying advanced energy project, the
taxpayer must make an election under the
rules set forth in § 1.46–5(o) of the Income
Tax Regulations. A taxpayer may not
make the qualified progress expenditures
election for a qualifying advanced energy
project until the taxpayer has received

September 14, 2009

an acceptance letter for the project under
section 5.02(8) of this notice.
.04 If a taxpayer makes the qualified
progress expenditures election pursuant to
section 10.03 of this notice, rules similar
to the recapture rules in § 50(a)(2)(A)
through (D) apply. In addition to the
cessation events listed in § 50(a)(2)(A),
examples of other events that will cause
the project to cease being a qualifying
advanced energy project are:
(1) Failure to receive a certification for
the project in accordance with section 7 of
this notice;
(2) Failure to place the project in service
within 3 years from the date of issuance of
the certification under section 7.01 of this
notice; or
(3) A significant change to the plans for
the project as set forth in the applications
for § 48C certification or DOE recommendation if, under section 8.03 of this notice,
the Service’s acceptance of the project is
void as a result of the change.
SECTION 11. DISCLOSURE OF
INFORMATION
.01 Announcement. Section 48C(d)(5)
provides that the Service shall, upon making a certification, publicly disclose the
identity of the applicant and the amount
of the credit certified with respect to
such applicant. Accordingly, the Service
will publish the results of the allocation
process, and disclose the following information in the event a qualifying advanced
energy project credit is allocated to the
taxpayer’s project: (a) the name of the taxpayer and (b) the amount of the qualifying
advanced energy project credit allocated
to the project.
.02 In General. An application for DOE
recommendation, an application for § 48C
certification, any other documentation
submitted by the taxpayer pursuant to section 7.02 of this notice, and any documentation generated by the Service or DOE as
part of this process are return information

September 14, 2009

subject to § 6103. Except for the items of
information that § 48C(d)(5) requires the
Service to make available to the public,
the other material remains the applicant’s
confidential return information, which is
exempt from disclosure under the Freedom of Information Act (FOIA), 5 USC
§ 552(b)(3), in conjunction with § 6103.
Other FOIA exemptions may also apply.
For example, FOIA includes exemptions
for trade secrets and commercial or financial information (5 USC § 552 (b)(4)),
as well as personal information (5 USC
§ 552(b)(6)).
.03 FOIA requests. Anyone interested
in submitting a request for records under the FOIA with respect to the qualifying advanced energy project program under § 48C (including a request for records
relating to the application for DOE recommendation) should direct a request that
conforms to the Service’s FOIA regulations, found at 26 C.F.R. § 601.702, to the
following address:
IRS FOIA Request
Baltimore Disclosure Office
Room 940
31 Hopkins Plaza
Baltimore, MD 21201
SECTION 12. EFFECTIVE DATE
This notice is effective August 14,
2009.
SECTION 13. PAPERWORK
REDUCTION ACT
The collection of information contained
in this notice has been reviewed and approved by the Office of Management and
Budget (OMB) in accordance with the Paperwork Reduction Act (44 U.S.C. § 3507)
under control number 1545–2151.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.

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The collections of information in this
notice are in sections 5, 6, 7, 8, and Appendix B of this notice. This information is
required to obtain an allocation of qualifying advanced energy project credits. This
information will be used by the Service to
verify that the taxpayer is eligible for the
qualifying advanced energy project credits. The collection of information is required to obtain a benefit. The likely respondents are business or other for-profit
institutions.
The estimated total annual reporting
burden is 110 hours.
The estimated annual burden per respondent varies from 70 to 150 hours, depending on individual circumstances, with
an estimated average of 110 hours. The estimated number of respondents is 1000.
The estimated annual frequency of responses is on occasion.
Books or records relating to a collection
of information must be retained as long
as their contents may become material in
the administration of any internal revenue
law. Generally, tax returns and return information are confidential, as required by
26 U.S.C. § 6103.
SECTION 14. DRAFTING
INFORMATION
The principal author of this notice
is Philip Tiegerman of the Office of
Associate Chief Counsel (Passthroughs
& Special Industries).
For further
information regarding this notice, contact
Philip Tiegerman at (202) 622–3110 (not a
toll-free number). For further information
regarding the application for certification,
the documentation to be submitted to the
Service establishing that the requirements
of § 48C(d)(2) are satisfied, and the
issuance of the certification that the
requirements of § 48C(d)(2) are satisfied,
contact Tina Meaux, Executive Assistant,
Office of the Industry Director, Natural
Resources and Construction, at (713)
209–3615 (not a toll-free number).

2009–37 I.R.B.

APPENDIX A
AGREEMENT
[Insert taxpayer’s name, address, and identifying number] (“Taxpayer”) and the Commissioner of Internal Revenue (“Commissioner”) make the following agreement:
WHEREAS:
1. On or before [insert date and year], Taxpayer submitted to the Internal Revenue Service (“IRS”), an application for certification under the qualifying advanced energy project program described in Notice 2009–72 (“Application for § 48C Certification”);
2. Taxpayer’s Application for § 48C Certification is for the qualifying advanced energy project (the “Project”) described below—
(1) The Project will be located at [insert address or other identifying designation];
(2) The Project [insert either: “re-equips”; “expands”; or “establishes”] a manufacturing facility for the production of [insert
type of property as described in § 48C(c)(1)(A)(i)(I) — (VII)].
(3) On [insert date of acceptance letter issued under section 5.02(8) of Notice 2009–72, the IRS accepted Taxpayer’s Application
for § 48C Certification for the Project and allocated a qualifying advanced energy project credit under § 48C in the amount of
$[insert number] to the Project.
NOW IT IS HEREBY DETERMINED AND AGREED FOR FEDERAL INCOME TAX PURPOSES THAT:
1. The total amount of the qualifying advanced energy project credit to be claimed for the Project under § 48C(a) must not
exceed $[insert the number in WHEREAS clause #3].
2. If Taxpayer fails to satisfy the certification requirements under section 7.02 of Notice 2009–72 within the time specified in
§ 48C(d)(2)(B) (1 year from [insert the date in WHEREAS clause #3]), or if the IRS does not issue a certification for the Project
under Notice 2009–72, the qualifying advanced energy project credit in the amount of $[insert the number in WHEREAS clause
#3] allocated to the Project is fully forfeited.
3. Taxpayer will notify the IRS in writing to the address listed in section 6.04 of Notice 2009–72 when the Project is placed in
service.
4. If the Project is not placed in service by Taxpayer within 3 years of the date of issuance of the certification as determined under
section 7.03 of Notice 2009–72, the qualifying advanced energy project credit in the amount of $[insert the number in WHEREAS
clause #3] allocated to the Project is fully forfeited.
5. If the plans for the Project change in any significant respect from the plans set forth in the application for DOE recommendation (as defined in section 5.01 of Notice 2009–72) and the Application for § 48C Certification (as defined in section 5.01 of Notice
2009–72) and, under section 8.03 of Notice 2009–72, the acceptance of Taxpayer’s Application for § 48C Certification on [insert
the date in WHEREAS clause #3] is void, the qualifying advanced energy project credit in the amount of $[insert the number in
WHEREAS clause #3] allocated to the Project is fully forfeited.
6. Taxpayer will not claim the qualifying advanced energy project credit under § 48C for any qualified investment for which
a credit is allowed under §§ 48, 48A, or 48B or for which a payment is received under § 1603 of the American Recovery and
Reinvestment Act of 2009, Division B of Pub. L. 111–5, 123 Stat 115.
7. If Taxpayer elects to claim the qualifying advanced energy project credit on the qualified progress expenditures paid or incurred by Taxpayer during the taxable year(s) during which the Project is under construction and the Project ceases to be a qualifying
advanced energy project (whether before, at the time, or after the Project is placed in service), rules similar to the recapture rules in
§ 50(a)(2)(A) through (D) apply.
8. Taxpayer reasserts that the following information is trade secret or proprietary information: [Insert “All information identified
as trade secret or proprietary in Taxpayer’s application for DOE recommendation” or list the specific information in Taxpayer’s
application for DOE recommendation to which the reassertion applies.]
9. This agreement applies only to Taxpayer. Any successor in interest must execute a new agreement with the IRS. If the interest
is acquired at or before the time the Project is placed in service and the successor in interest fails to execute a new agreement, the
qualifying advanced energy project credit in the amount of $[insert the number in WHEREAS clause #3] allocated to the Project is
fully forfeited. If the interest is acquired after the time the Project is placed in service and the successor in interest fails to execute
a new agreement, the Project ceases to be investment credit property and the recapture rules of § 50(a) apply.
THIS AGREEMENT IS FINAL AND CONCLUSIVE EXCEPT:
1. The matter it relates to may be reopened in the event of fraud, malfeasance, or misrepresentation of a material fact;
2. It is subject to the Internal Revenue Code sections that expressly provide that effect be given to their provisions notwithstanding any law or rule of law; and
3. If it relates to a tax period ending after the date of this Agreement, it is subject to any law enacted after such date, which
applies to the tax period.
By signing, the parties certify that they have read and agreed to the terms of this Agreement.

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Taxpayer: [insert name and identifying number]
Date Signed:

By:
[insert name]
Title: [insert title]
[insert taxpayer’s name]
Commissioner of Internal Revenue
By:

Date Signed:
[insert name]

Title: [insert title]
I have examined the specific matters involved and recommend the acceptance of the proposed agreement.
(Receiving Officer) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Title) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Date Signed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I have reviewed the specific matters involved and recommend the acceptance of the proposed agreement.
(Receiving Officer) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Title) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Date Signed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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APPENDIX B
REQUEST FOR APPLICATIONS FOR DOE RECOMMENDATION
The Internal Revenue Service (“IRS”) with the assistance of the Department of Energy (“DOE”) seeks to select for certification
applications that demonstrate a reasonable expectation of commercial viability and is eligible for consideration based on the
selection criteria in § 48C(d)(3)(B). To be eligible, applications must be for qualifying advanced energy projects and projects must
be commercially feasible.
This Request for Applications for DOE Recommendation:
1. Describes the information to be provided by the applicant to allow DOE to review and recommend projects, and
2. Identifies the merit review criteria and Program Policy Factors to be used by DOE in the review of applications.
In conducting this review, the DOE may utilize assistance and advice from qualified personnel from other Federal agencies and/or
contractors that do not have a personal or organizational conflict of interest. DOE will obtain assurances in the form of a
non-disclosure acknowledgement/agreement in advance from all reviewers that application information shall be kept confidential
and used only for reviewing purposes.
DOE reserves the right to request clarifications and/or supplemental information from some or all applicants through written
submissions and/or oral presentations.
DOE may determine whether to recommend an application to the IRS at any time after the application has been received, without
further exchanges or discussions. Therefore, all applicants are advised to submit their most complete and responsive application.
Applications will not be returned.
Neither a procurement action (under Title 48 of the Code of Federal Regulations) nor a financial assistance award (under
10 CFR Part 600) is contemplated based on an application.
SUBMISSION INFORMATION FOR DOE RECOMMENDATION PROCESS
A. General
An application for DOE recommendation and ranking must include a Project Information Memorandum as described below,
together with the information required by sections 6.02, 8.01, and 8.02 of Notice 2009–72 (Notice.) All applications shall be
prepared in accordance with this request for applications for DOE recommendation in order to provide a standard basis for review
and to ensure that each application will be uniform as to format and sequence.
Each application should clearly address each merit review criterion and program policy factor to demonstrate the applicant’s
capability, knowledge, and experience regarding the requirements described herein.
Applicants should fully address the requirements of the Notice and this request and not rely on the presumed background
knowledge of reviewers. DOE may reject an application that does not follow the instructions regarding the organization and
content of the application when the nature of the deviation and/or omission precludes meaningful review of the application.
B. Unnecessarily Elaborate Applications
Unnecessarily elaborate brochures or other presentations beyond those sufficient to present a complete and effective application
are not desired. Elaborate art work, graphics and pictures are neither required nor encouraged.
C. Application Submission for DOE Recommendation
The application to DOE must include the information and documentation required by sections 8.01 and 8.02 of the Notice.
An application to DOE will not be considered in the allocation conducted in 2009–2010 unless the preliminary application is
received by September 16, 2009 and the final application is received by October 16, 2009. Two electronic copies (on a compact
disc) of both the preliminary application and final application should be sent to DOE: one original with full text and one copy with
confidential information redacted.
If elements of and/or attachments to an application contain information the applicant considers to be trade secret, confidential,
privileged or otherwise exempt from disclosure under the Freedom of Information Act (FOIA, 5 U.S.C. 552), the applicant shall
assert a claim of exemption at the time of application by placing the following text on the first page of the application, and
specify the page or pages of the application to be restricted:

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“The data contained in pages [
] of this document which hereby forms a part of the application have been submitted
in confidence and contain trade secrets or proprietary information, and such data shall be used or disclosed only for
review purposes, provided that, if this applicant is issued a tax credit under Section 1302 of the American Recovery and
Reinvestment Act of 2009 as a result of or in connection with the submission of this application, DOE shall have the
right to use or disclose the data herein, other than such data that have been properly reasserted as being trade secret
or proprietary in the agreement required under section 5.02 of Notice 2009–72. This restriction does not limit the
government’s right to use or disclose data obtained without restriction from any source, including the applicant.”
To further protect trade secret, confidential, privileged or otherwise exempt information, each line or paragraph on the page or
pages containing such data must be specifically identified and marked with text that is similar to the following:
“The following contains proprietary information that [name of applicant] requests not be released to persons outside
the Government, except for purposes of review.”
Applications may be submitted electronically to [email protected]. Alternatively, applications may be submitted to
the physical address which will be posted on www.energy.gov/recovery/48C.htm.
THE INFORMATION REQUIRED BY THIS REQUEST FOR APPLICATIONS FOR DOE RECOMMENDATION
MUST BE SUBMITTED USING THE FORMAT AND THE HEADINGS OF THE “PROJECT INFORMATION
MEMORANDUM” AS DESCRIBED BELOW.
To aid in review, applications shall be clearly and concisely written and logically assembled. All pages of each part shall be
appropriately numbered and identified with the name of the applicant and the date.
The application, including the Project Information Memorandum, MUST be formatted in one of the following software
applications:
Microsoft Wordtm 2002 or later edition
Microsoft Exceltm 2002 or later edition
Adobe Acrobattm PDF 6.0 or later edition
Financial models should be submitted using the Exceltm spreadsheet and must include calculation formulas and assumptions.
The applicant is responsible for the integrity and structure of the electronic files. The DOE will not be responsible for
reformatting, restructuring or converting any files submitted in response to this request.
The Project Information Memorandum, excluding Appendices, shall not exceed thirty (30) pages for the final application. Pages
in excess of the page limitation will not be considered for review. All text shall be typed, single spaced, using 12 point font, 1
inch margins, and unreduced 8–1/2-inch by 11-inch pages. Illustrations and charts shall be legible with all text in legible font.
Pages shall be sequentially numbered. Except as otherwise noted herein, the page guidelines previously set forth constitute a
limitation on the total amount of material that may be submitted for review. No material may be incorporated in any application
by reference as a means to circumvent the page limitation.
Application sections shall be saved as separate files and named as described below:

APPLICATION SECTION

FILE NAME

Preliminary Application
Project Information Memorandum

Preliminary Application applicant name.doc (or .pdf)
Project Information Memorandum applicant name.doc (or .pdf)

Chapter 1.
Chapter 2.
Chapter 3.
Chapter 4.
Chapter 5.

Executive Summary
Advanced Energy Project Qualification
Emissions and Pollution Impact
Technological Innovation
Project Schedule

Applicant Data Input Spreadsheet
Appendices

September 14, 2009

Applicant Data Input Spreadsheet applicant name.xls
Appendix 1 applicant name.doc (or .pdf), and as needed
Appendices 2, 3, 4 etc.

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D. Application Process for DOE Recommendation and Due Dates
DOE requires a short summary of the project in the form of a preliminary application as well as a final application. Please read
carefully the Notice and the statute to determine if your project is eligible for the manufacturing tax credit. The tax credits are
for manufacturing facilities; they are not for renewables or energy efficiency installation projects.
DOE plans to review applications and recommend for tax credits through the following specific steps:

Application Timeline

Due Date

Applicant Submission of a Preliminary Application

9/16/2009

Applicant submission of a Final Application

10/16/2009

DOE Completion of merit review of Final Applications

12/16/2009

E. Preliminary Application Content and Format
The applicant should fill out the preliminary application in Section I, which is for the DOE to preview the types of forthcoming
final applications in order to establish the relevant resources for an efficient and effective review process.
In part 2 of the preliminary application, “Narrative Describing the Scope of the Project”, the applicant should provide a brief
description of the project, including such details as:

•
•
•
•

A summary of the project.
The specified advanced energy property (SAEP) the re-equipped, expanded or new manufacturing facility will produce. In
the case of a project producing property that, after further manufacture, will become SAEP, the applicant should describe
both the property produced at the facility and the SAEP for which the produced property will be used.
Current project status and progress to date.
Project schedule and milestones through the placed in service date.

F. Final Application Process
DOE will review and recommend projects based on the following eligibility and evaluation criteria and Program Policy Factors:
Eligibility Criteria

•
•

Eligibility Criterion 1: qualifies as an advanced energy project
Eligibility Criterion 2: has a reasonable expectation of commercial viability

Evaluation Criteria

•
•
•
•

Evaluation Criterion 1: provides the greatest domestic job creation (both direct and indirect) during the credit period (February 17, 2009, through February 17, 2013);
Evaluation Criterion 2: provides the greatest net impact in avoiding or reducing air pollutants or anthropogenic emissions
of greenhouse gases;
Evaluation Criterion 3: has the greatest potential for technological innovation and commercial deployment, as indicated by
(i) the production of new or significantly improved technologies, (ii) improvements in levelized costs and performance, and
(iii) manufacturing significance and value; and
Evaluation Criterion 4: has shortest project time from certification to completion.

These four Evaluation Criteria are all equally weighted.
Program Policy Factors

•
•
•
•

Program Policy Factor 1:
Program Policy Factor 2:
Program Policy Factor 3:
Program Policy Factor 4:

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Geographic Diversity
Technology Diversity
Project Size Diversity
Regional Economic Development

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In an effort to make the application process suitable to a diverse set of projects and streamline the DOE review, applicants must
input the data necessary to address the merit review criteria into the Applicant Data Input Spreadsheet, shown in Section J1.
Each proposed project will be reviewed based on the SAEP produced at the manufacturing facility. In the case of a project
producing property that, after further manufacture, will become SAEP, the DOE will review the project based on the SAEP for
which the property produced at the facility will be used. For example, the review under the emissions criterion for a project that
manufactures wind turbine blades will be in the context of the emissions profile of wind turbines, rather than the more narrow
characteristics of blade production alone. In this example, the wind turbine blade will be assigned a portion of the overall emissions
profile of a wind turbine based on the percentage of the wind turbine’s cost that is attributable to the wind turbine blade, as discussed
in Section G below.
The applicant must calculate the incremental energy produced, saved or stored due to the project. The applicant will be required
to provide and show the work used to produce derived numeric values specific to its manufacturing facility. In addition, it is critical
that the applicant show and support all necessary calculation steps in the project’s narrative.
The DOE review and recommendation process generally requires the use of the United States (U.S.) national averages (e.g.,
national grid mix, national fleet fuel efficiency) as a baseline for certain comparisons2.
G. Final Application Content and Format
This section outlines the format of the final application to be submitted by the applicant to the DOE for project recommendation.
Guidelines and suggestions for specific content are included below.
Outline for Final Application
I. EXECUTIVE SUMMARY AND INTRODUCTION
Provide an overall summary of the project to manufacture qualifying advanced energy property, covering things such as:

•
•
•
•
•
•
•
•
•

A description of the project, including incremental manufacturing capacity.
Location of the project.
The SAEP the re-equipped, expanded or new manufacturing facility will produce. In the case of a project producing
property that, after further manufacture, will become SAEP, the applicant should describe both the property produced
at the facility and the SAEP for which the produced property will be used.
The amount of tax credit requested and the estimated amount that will be treated as a qualified investment. (The applicant must request a credit equal to 30 percent of the estimated amount that will be treated as a qualified investment (as
determined under § 48C) if the project is certified as a qualified advanced energy project. The applicant may use any
reasonable methodology and assumptions in determining such estimated amount.)
Current project status and schedule, with milestones, through the placed in service date.
Summary of the main parties to the project, including owners, investors and technical partners.
Summary of the financial strength of owners, investors and technical partners and the technical capabilities and experience of the technical partners providing key components to the project.
Overview of the intellectual property arrangements with respect to the property produced.
Confirmed or potential customers who will purchase, lease or use the property produced.

II. DEMONSTRATION OF ELIGIBILITY
A. ADVANCED ENERGY PROJECT QUALIFICATION
To facilitate a determination of eligibility that the project qualifies as an advanced energy project, the applicant should
submit a description of the proposed project, including such details as:
1. Whether the project will re-equip, expand or establish a manufacturing facility.
2. The SAEP the re-equipped, expanded or new manufacturing facility will produce. In the case of a project producing
property that, after further manufacture, will become SAEP, the applicant should (a) describe both the property
produced at the facility and the SAEP for which the produced property will be used, and (b) state the percentage of the
property produced at the facility that will be used for the production of SAEP.

1 If an applicant can justify that it has a value that better represents its project than the values referenced in the Applicant Data Input Spreadsheet, the applicant may 1) select a value reported
in the open literature, justify the use of this value as opposed to one supplied by DOE, and perform any necessary unit conversions, or 2) develop an independent estimate analogous to ones
supplied in the Section H. Any customized calculations should be done according to commonly accepted industry standards and be sufficiently transparent to be reproducible by the merit
review panel.
2

An applicant may provide a different baseline for comparison if the applicant can justify that the specified advanced energy property attributable to the project will be put in service in a more
narrowly-defined geographic region. Any customized calculations should be done according to commonly accepted industry standards and be sufficiently transparent to be reproducible by
the merit review panel.

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B. COMMERCIAL VIABILIITY
To describe the project economics and present evidence of commercial viability, the applicant should provide as
appendices:
1. A business plan which provides a description of the proposed project, containing such information as:
a. A list of the key management team members who will design, construct, permit, and operate the facility.
b. A description of the capabilities and experience of the applicant, contractor, and suppliers of major subsystems or
equipment. The applicant should demonstrate that the management team members have a corporate history of
successful completion of similar projects, including, if applicable, similar projects completed outside the U.S.
c. The financing and ownership structure, including all beneficiaries. The applicant must be a U.S. taxpayer.
d. The financial strength of owners, investors and technical partners.
e. Overview of intellectual property arrangements with respect to the property produced.
f.

The estimated amount that will be treated as a qualified investment (as determined under § 48C) if the project
is certified as a qualified advanced energy project. The applicant may use any reasonable methodology and
assumptions in determining such estimated amount 3.

g. The estimated amount, together with a description of the methodology and assumptions used in determining
such costs, of the following expenses, if applicable:
i.

Costs of acquisition, lease, or rental of real property, including engineering fees, surveys, title insurance,
recording fees, and legal fees incurred in connection with land acquisition, lease or rental, site
improvements, site restoration, access roads, and fencing;

ii.

Costs of engineering, design, architectural, legal and bond fees, and insurance paid in connection with
construction of the facility; and materials, labor, services, travel and transportation for facility design,
construction, startup, commissioning and shakedown;

iii.

Costs to provide equipment, facilities, and services related to safety and environmental protection;

iv.

Financial and legal services costs, including other professional services and fees necessary to obtain
required licenses and permits and to prepare environmental reports and data;

v.

Costs of issuing project debt, such as fees, transaction and legal costs and other normal charges imposed
by lenders;

vi.

Costs of necessary and appropriate insurance and bonds of all types;

vii.

Costs of obtaining licenses to intellectual property necessary to design, construct, and operate the project;

viii.

A reasonable contingency reserve for cost overruns during construction;

ix.

Capitalized interest necessary to meet market requirements, reasonably required reserve funds and other
carrying costs during construction; and

x.

Other necessary and reasonable costs.

h. The timeframe, with milestones, required for construction and commissioning of the project.
i.

Confirmed or potential customers who will purchase, lease or use the property produced.

j.

A description of the amount and timing of off-take agreements to be entered into prior to commercial operation
and the financial strength of off-takers.

k. A discussion of current competing products and competitors likely to enter the target market.
l.

If applicable, any infrastructure improvements necessary for target markets, the concurrent capital needed, and
other factors necessary for deployment of the SAEP attributable to the project.

2. A financial plan for the proposed project, containing such information as:
a. The amount of equity to be invested and the sources of such equity. Include as a separate appendix copies of any
existing equity funding commitments or expressions of interest from equity funding sources for the project.

3

The applicant should note that eligible property does not include a building or its structural components.

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b. The amount of the total debt obligations to be incurred and the funding sources of all such debt. Include as a
separate appendix copies of any existing debt funding commitments or expressions of interest from debt funding
sources for the project.
c. Any other Federal, State or local government funding assistance.
d. A financial model detailing the investments in and the cash flows generated and anticipated from the project over
the project’s expected lifecycle, including a complete explanation of the facts, assumptions, and methodologies
in the financial model.
III. EVALUATION CRITERIA
A. DOMESTIC JOB CREATION
The DOE will primarily focus on direct job creation for this evaluation criterion. In addition, DOE will take into
consideration indirect job creation. For both direct and indirect jobs, DOE will emphasize those jobs that are created
during the credit period (February 17, 2009, through February 17, 2013).
Please fill out the “Direct Jobs” tab in the Applicant Data Input Spreadsheet and list the direct jobs in terms of full-time
equivalents (FTEs) that will be created during both construction and operation of your facility.4 Please be as specific
as possible, as reviewers will assess the reasonableness of applicants’ assertions. Direct Jobs are jobs of people whose
work is directly billed to the project.
Do not list Indirect Jobs. Indirect Jobs are employees in the supply chain who are not included as direct jobs. Examples
include those working for producers of materials, equipment, and services that are used on the project, such as steel
producers, accounting services or end use installers. The review team will calculate the indirect jobs using a consistent
methodology based on nationwide input/output economic models for advanced manufacturing.
B. IMPACT ON AIR POLLUTION AND ANTHROPOGENIC EMISSIONS OF GREENHOUSE GASES
Describe the direct impact that the SAEP will have on air pollution and anthropogenic emissions of greenhouse gases
(GHG). Annual pollution and GHG emissions from the manufacture, deployment, and operation of the manufactured
product should be quantified and discussed. This description includes:
1. Total emissions reduced as derived by the project’s Attributable Annual Manufacturing Capacity (AAMC) and
the output of the Applicant Data Input Spreadsheet, as shown in Section J, for the re-equipped, expanded or new
manufacturing facility. Emissions reduction will be divided by the amount of tax credit requested to determine a
normalized value for comparing different project proposals.5
2. A discussion of additional emissions considerations beyond the calculation in part 1, above. This should include such
details as the emissions of the manufacturing facility relative to the emissions of comparable manufacturing facilities.
3. A discussion of GHG emissions and air pollutants generated, along the full supply chain, for the manufacture,
installation, operation, and decommissioning of the SAEP to which the project will contribute. If this is unknown, the
applicant should make an estimate based on the SAEP, using cited numbers.
C. TECHNOLOGICAL INNOVATION AND COST REDUCTION
To present evidence of the potential for technological innovation and commercial deployment, as indicated by (i) the
production of new or significantly improved technologies, (ii) improvements in levelized costs and performance, and (iii)
manufacturing significance and value, the applicant should provide:
1. A discussion of whether the project will produce a new or significantly improved technology as compared to
commercial technologies currently in service in the U.S. 6,7

4

Full-time equivalent (FTE) is a way to measure a worker’s involvement in a project. An FTE of 1.0 means that the person is equivalent to a full-time worker, while an FTE of 0.5 signals that
the worker is only half-time. FTE is defined by the Government Accountability Office (GAO) as the number of total hours worked divided by the maximum number of compensable hours
in a work year as defined by law. For example, if the work year is defined as 2,080 hours, then one worker occupying a paid full time job all year would consume one FTE. Two employees
working for 1,040 hours each would consume one FTE between the two of them.

5

If the applicant believes that the total emissions reduced from the specified advanced energy property attributable to the project is not accurately represented by the values provided in the
Applicant Data Input Spreadsheet, the applicant may, in addition to completing the respective sections of the Applicant Data Input Spreadsheet, provide a transparent justification of a different
calculation and should employ cited numbers wherever assumptions are made.

6 A new or significantly improved technology means a technology that is concerned with the production, consumption or transportation of energy is not a commercial technology currently
in use in the U.S., and either (i) has only recently been developed, discovered or learned; or (ii) involves or constitutes one or more meaningful and important improvements in productivity
or value in comparison to commercial technologies currently in use in the U.S.
7 A commercial technology currently in use in the U.S. means a technology currently in general use in the commercial marketplace in the U.S. A technology is in general use if it has been
installed in and is being used in three or more commercial projects in the U.S. in the same general application as in the proposed project, and has been in operation in each such commercial
project for a period of at least five years. The five-year period shall be measured, for each project, starting on the in-service date of the project or facility employing that particular technology
and ending on October 16, 2009.

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2. Calculations of incremental cost improvements for the SAEP attributable to the facility, relative to comparable
existing energy solutions. This information is captured with the related metrics of cost advantage over competitors,
levelized cost, and the cost of CO2 abatement. Section G(IV) below explains these metrics and their quantification in
greater detail.
a. In addition to cost improvements, the applicant should describe other technological improvements for the SAEP
attributable to the facility, as compared to the respective baseline energy solution.
3. A calculation of the AAMC in the “Attributable Manufacturing” tab of the Applicant Data Input Spreadsheet.
The AAMC will be divided by the amount of tax credit requested to determine a normalized value for comparing
different project proposals.
D. PROJECT SCHEDULE AND TIME TO COMPLETION
1. To quantify the time from certification to completion, the applicant should fill out the respective sections of the
“Applicant Data Sheet” tab of the Applicant Data Input Spreadsheet. The dates required are: date of receiving all
permits; date of construction; date of commencement of production.
2. In addition, the applicant should provide a narrative supporting the applicant’s capability to accomplish the technical
objectives of the proposed project and demonstrating the overall feasibility of implementing the project at the
proposed site. This includes, but is not limited to:
a. A project schedule that (1) is comprehensive and provides sufficient detail to demonstrate how applicant will
meet the certification requirements, and (2) demonstrates that the project is on track to be placed in service
within 3 years of such certification. The schedule should demonstrate that the applicant understands the required
tasks and has allowed realistic times for accomplishing the technical and financial tasks. The schedule should
include the milestones.
b. A description of the applicant’s plan to obtain and complete all necessary permits, and environmental
authorizations and reviews.
c. A description of the current infrastructure at the site available to meet the needs of the project.
3. This section requires the following documentation, as is applicable to the project, to be included as appendices:
a. A complete list of all Federal, State, and local permits, including environmental authorizations (if applicable) or
reviews, necessary to commence construction of the project. Explain what actions have been taken to date to
satisfy the required authorizations and reviews, and the status of each.
b. Documentation supporting applicant’s conclusion that the proposed site can fully meet all environmental, water
supply, transmission interconnect (if applicable), and other applicable requirements. Such documentation may
include signed agreements, letters of intent, or term sheets, such as for supply and product transportation, and
regulatory approvals (if applicable) supporting the key claims.
c. Documentation demonstrating the applicant’s ownership or control of the project site, such as a deed, a signed
option to purchase the site from the site owner, or a letter of intent to sell or lease.
d. Copies of the contracts or summaries of the key provisions of the following agreements:
i.

Operations & Maintenance Agreement: include a summary of the terms and conditions of the contract and
a copy of the contract.

ii.

Shareholders Agreement: summarize key terms and include the agreement as an appendix.

iii.

Engineering, Procurement and Construction Agreement: describe the key terms of the existing or expected
contract arrangement, including firm price, liquidated damages, hold-backs, performance guarantees, etc.

IV. INSTRUCTIONS REGARDING QUANTITATIVE FACTORS INFORMATION SUBMISSION
Applicants should fill out the Applicant Data Input Spreadsheet with the relevant data and include it with the application. This
is intended to capture information in a consistent manner to allow a quantitative comparison to be made across all eligible
projects. It is essential that applicants conform to this process in order to ensure a competitive review of all proposals.
Additionally, applicants should substantiate in their narrative any data which is inputted into the Applicant Data Input
Spreadsheet. Specifically, applicants should cite or justify their stated assumptions and show any calculations which are not
performed by the Applicant Data Input Spreadsheet. The information below provides instructions for inputting data, examples
specific to each type of SAEP, and guidance on how to use the reference data listed in Section H.

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AAMC
In order to assess the significance of an applicant’s proposed project, the following formulas (or their equivalent) must be
used to quantify the AAMC. AAMC measures the total impact over the lifetime of deployed property which is attributable
to one year of manufacturing. The AAMC will be divided by the qualified investment to determine the relative value, per
dollar of tax credit, of different project proposals. Finally, the AAMC will be used to assess production significance and
emissions abatement on a per-dollar-of-tax-credit basis.
General AAMC Instructions: The AAMC is calculated with four terms, annual production, fractional system contribution,
annual performance of the SAEP, and expected lifetime of the deployed property. For annual production, applicants are
required to justify the claimed production by providing yield loss (both manufacturing and downstream) and throughput
data wherever possible. In particular, applicants should discuss previous manufacturing experience on similar or identical
manufacturing equipment. If the applicant’s annual production is not measured in terms of kWh, gallons of gasoline, or Mtons
CO2 (e.g., solar water heating, biodiesel, or methane gas recapture, respectively) then a conversion factor between the units
of measurement and kWh, gallons of gasoline, or Mtons CO2 should be cited and applied. When calculating the fractional
system contribution, applicants should transparently state and justify (with citations wherever possible) current and future
pricing assumptions for all significant value chain segments, including the property produced at the proposed facility. To
calculate real-world annual performance, applicants should identify and employ the necessary de-rating factors, including
degradation rates, such that the claimed annual performance is reflective of the average annual performance over the lifetime
of the SAEP. Where appropriate, typical resource and use conditions should be chosen from the reference data provided in
Section H. If the necessary reference data is not available or representative of the applicant’s specific manufactured property,
the applicant should provide and substantiate assumptions with market reports and/or field data where possible. A similar
approach should be taken for the deployed property lifetime. Specifically, if reference data from Section H is not used, the
applicant should cite life-cycle performance data of previously deployed, comparable property. Provided below are equations
and examples corresponding to each type of SAEP which can be used as high level guidance when calculating AAMC.
Electricity Generation: For SAEP used to produce energy from the sun, wind, geothermal, or other renewable resources,
the following formulas shall be used to estimate the electricity generation attributable to property produced at the proposed
facility. Specifically, the AAMC is the kWhs generated which can be attributed to one year’s worth of production from
the proposed project:

Where:

And:

Example:
A photovoltaic company is building a “50 MW” crystalline silicon solar cell manufacturing line. 50 MW is input as the first
term “Wpeak production per year” which is the annual peak power output of property produced from the manufacturing line. This
50 MW number is multiplied by a series of terms to produce an AAMC that represents the true lifetime electricity generation
from this property after it is deployed.
The second term, “Fractional System Contribution” is used to discount the 50 MW by the solar cell’s fraction of a solar
system’s total value. In this example, the company purchases silicon wafers and other consumable materials and processes
them into a functional cell. The Fractional System Contribution represents the added value that the manufacturing process adds
to the final system price. If the market value of a wafer and consumables is $1/Wp, the cells are sold for $1.50/Wp, and the total
factory gate price of the entire photovoltaic system (including the inverter and balance of system components) is $5/Wp, then
the Fractional System Contribution is (1.5–1)/5=10%. Note: in this example, 100% of the product manufactured by the solar
cell line is allocated for SAEP. If instead, some fraction of the rated 50 MW capacity was allocated for an application other than
SAEP, then the “Percentage SAEP” would be reduced from 100% to account for this diverted product stream.
The third term, “Capacity Factor” is used to calculate the ratio of annual energy produced to the total energy implied by the
peak power rating of the manufactured property. In this example, the power output of the cells are reduced slightly when they

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are incorporated into a module and reduced further when the DC power from the module is converted to useable AC power via
an inverter. Additionally, the modules are projected to degrade over their deployed lifetime. The actual average annual energy
output of the system over its lifetime is determined by these reductions and the annual solar insulation or resource which is
typical of current installations.
The fourth term, “Deployed Property Lifetime”, is the anticipated hours of operation of the manufactured property over its
lifetime (after being incorporated into an end of supply chain component or system). In this example, the end of supply chain
component is a photovoltaic module which may have a lifetime of 30 years. Thus the Deployed Property Lifetime would be
219000 hours (30 years multiplied by 8760 hours per year). Note: if the end of supply chain component property was instead, a
PV inverter, then the Deployed Property Lifetime would be the expected lifetime, as evidenced by warranty or field data, of the
inverter not the PV system. If the potential lifetime of the end of supply chain component is longer than the expected lifetime
of the generation system, then the Deployed Property Lifetime should be equal to the expected system lifetime.
Energy Conservation: For SAEP designed to conserve energy, such as advanced building, smart grid, or industrial technologies,
the following formulas shall be used to estimate the energy saved which is attributable to the incorporation of the property
produced at the proposed facility. Specifically, the AAMC is the kWhs saved which can be attributed to one year’s worth of
production from the proposed project:

Where:

And:

Example:
A heating, ventilating, and air conditioning (HVAC) equipment supplier is re-equipping a factory for the manufacture of
advanced condensers. The re-equipping will enable 10,000 advanced condensers to be manufactured annually. This number
will be input as the first term “# Units per year.” For the equations used above, the condenser could represent a sub-component
of an advanced HVAC “component” (the complete collection of sub-components required to enable the conservation of energy,
e.g., an advanced air handler, controller, packaging unit, etc). Alternatively, if the condenser alone provides the full energy
conservation benefit and can be integrated with traditional HVAC systems in a straightforward manner, then the condenser
would be the “component”. In either case, the energy consuming “system” is the entire energy load which is directly impacted
by, and fully encompassing of the energy conservation benefit. For this example, the system is simply a building.
The second term, “Fractional Component Contribution” is used to calculate the value fraction of an end of supply chain
component that the manufactured condenser comprises. In this example, the company purchases supplies (fans, tubing, etc.)
and materials (sheet metal, solder, etc.) to assemble a functional condenser. The “Fractional Component Contribution” represents the added value that the manufacturing process adds to the final component price. If the market value of the supplies
and materials is $100 per unit, the controller assembly is sold to downstream manufacturers for $200, and the total “factory
gate” price to a HVAC installer of the entire HVAC component is $2000, then the “Fractional Component Contribution” is
(200–100)/2000 = 5%. Note: if for example, 20% of the units manufactured were used in a different system where there was
no energy conservation benefit, then the “Percentage SAEP” term would be 80% and the “Fractional Component Contribution”
would be further reduced accordingly.
The third term, “Annual Energy Savings per Unit” is used to calculate the annual energy savings which is enabled by incorporating only the component into a system and assuming typical climate and operation. In this example, the electricity
consumption of the building may be decreased by 5000kWh per year.
The fourth term, “Deployed Property Lifetime”, is the anticipated years of operation of the manufactured property over its
lifetime. In this example, the anticipated years of operation should equal the warranty on the entire HVAC unit. Note: if the
sub-component lifetime is shorter than the expected lifetime of the component, then the sub-component lifetime should be used
for the “Deployed Property Lifetime”. The lifetime of the sub-component cannot be longer than the lifetime of the component
or system in which it is installed.

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Fuel Efficiency: For SAEP which increases fuel efficiency, such as a hybrid-electric or plug-in electric drive motor vehicle, the
following formulas shall be used to estimate the annual energy saved which is attributable to the incorporation of the property
produced at the proposed facility. Specifically, the AAMC is annual fuel savings which can be attributed to one year’s worth
of production from the proposed project:

Where:

And:

Example 1:
An automobile supplier is expanding a factory for the manufacture of hybrid-electric controller assemblies. The expansion
will enable 10,000 additional controllers to be manufactured annually. This number will be input as the first term “# Units per
year.” For the equations used above, the controller could represent a sub-component of a hybrid drive train “component” (the
complete collection of sub-components required to enable the efficiency improvement, e.g., a controller, battery, and electric
motors). Alternatively, if the controller alone provides the full fuel efficiency improvement and can be integrated with a traditional powertrain, then the controller would be the “component”. In either case, the fuel consuming “system” is the entire
load which is directly impacted by, and fully encompassing of the fuel efficiency improvement. For this example, the system
is simply the vehicle.
The second term, “Fractional Component Contribution” is used to calculate the value fraction of an end of supply chain
component that the manufactured controller assembly comprises. In this example, the company purchases supplies (PCBs,
power controllers, etc.) and materials (adhesives, wiring, etc) to assemble a functional controller. The “Fractional Component
Contribution” represents the added value that the manufacturing process adds to the final component price. If the market value
of the supplies and materials is $500 per unit, the controller assembly is sold to downstream manufacturers for $1000, and the
total “factory gate” price to an automobile manufacturer of the entire hybrid electric component is $4000, then the “Fractional
Component Contribution” is 12.5%. Note: if, for example, 10% of the units manufactured were allocated instead for electric
golf carts (non-SAEP) then the “Percentage SAEP” term would be 90% and the “Fractional Component Contribution” would
be further reduced accordingly.
The third term, “Annual Fuel Savings per Unit” is used to calculate the annual fuel savings which is enabled by incorporating
only the component into a system under typical use patterns. In this example, the fuel economy of the vehicle may be increased
by 10 miles per gallon. The actual annual fuel savings would be determined by this increase in fuel economy and the annual
vehicle miles traveled, for which the applicant should provide cited data. For alternative fuels such as diesel, savings should
be converted to gallons of gasoline equivalent (GGE). For electric vehicle (EV) or plug-in hybrid electric vehicle (PHEV)
systems, where electricity is consumed to further reduce the fuel consumption, an additional calculation of MWh consumed
per GGE saved is required in the calculation of CO2 emissions. See further instructions under “Impact on Air Pollution and
Anthropogenic Emissions of Greenhouse Gases”.
The fourth term, “Deployed Property Lifetime”, is the anticipated years of operation of the manufactured property over
its lifetime. In this example, the anticipated years of operation should be substantiated by citing fleet lifetime of previously
deployed comparable systems. Note: if the sub-component lifetime is shorter than the expected lifetime of the system, then the
sub-component lifetime should be used for the “Deployed Property Lifetime”. For example, if the subcomponent was a battery
for an electric vehicle then the anticipated lifetime might be the warrantied lifetime of the battery rather than the anticipated
lifetime of the vehicle. The lifetime of the sub-component cannot be longer than the lifetime of the component or system in
which it is installed.

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Example 2:
A manufacturer of reciprocating engines is building a new factory to manufacture a new, high-efficiency engine for use
in Combined Heat and Power (CHP) systems. CHP applications are included in “fuel efficiency” for purpose of this notice
because they consume energy in the production of electricity and thermal energy.8
The new factory will enable 1,000 high-efficiency engines to be manufactured annually. This number will be input as the
first term “# Units per year”. For the equations used above, the reciprocating engines could represent a sub-component of
a CHP “component” (the complete collection of sub-components required to enable the efficiency improvement — e.g., fuel
handling, thermal recovery unit, integrated controls, etc). The energy consuming “system” is the entire energy load which is
directly impacted by, and fully encompassing of the efficiency improvement. For CHP, the system may be an industrial building,
hospital or other building.
The second term, “Fractional Component Contribution” is used to calculate the value fraction of an end of supply chain
component that the manufactured engine comprises. In this example the company purchases supplies (fuel pumps, tubing, etc)
and materials (engine blocks, wire, etc) to assemble a completed engine. The “Fractional Component Contribution” represents
the added value that the manufacturing process adds to the final component price. If the market value of the supplies and
materials is $40,000 per unit, the controller assembly is sold to downstream manufacturers for $100,000, and the total “factory
gate” price to an engineering firm of the complete CHP system $150,000, then the “Fractional Component Contribution” is
(100,000–40,000)/150,000 = 40%. Note: if for example, 25% of the units manufactured were used in a different system where
there was no efficiency improvement or the system does not qualify as SAEP, then the “Percentage SAEP” term would be 75%
and the “Fractional Component Contribution” would be further reduced accordingly.
The third term, “Annual Energy Savings per Unit” is used to calculate the annual energy savings which is enabled by incorporating only the component into a system and assuming typical climate and operation. In this example, the CHP system saves
energy by displacing electricity from the grid and onsite thermal energy generation that would be generated by a boiler or other
device. The net annual energy savings is the energy that would be consumed by grid generated electricity plus the energy that
would be consumed by the onsite boiler minus the energy consumed by the CHP system. This net energy should be expressed
in terms of gallons of gasoline equivalent using the conversion factors provided in the Applicant Data Input Spreadsheet.
The fourth term, “Deployed Property Lifetime”, is the anticipated years of operation of the manufactured property over its
lifetime. In this example, the anticipated years of operation should equal the warranty on the entire CHP system. Note: if the
sub-component lifetime is shorter than the expected lifetime of the system, then the sub-component lifetime should be used for
the “Deployed Property Lifetime”. The lifetime of the sub-component cannot be longer than the lifetime of the component or
system in which it is installed.
GHG Emission Reduction: For SAEP with the primary purpose of reducing emissions or sequestering GHG, the following
formulas shall be used to estimate the annual emission reduction in CO2 equivalent gases. Specifically, the AAMC is the Mtons
of avoided CO2 equivalent gas emission which can be attributed to one year’s worth of production from the proposed project.

Where:

And:

8 Although the energy source for a CHP system may be renewable (e.g., landfill gas), the CHP system displaces thermal energy production (e.g., a boiler) that would typically use fossil fuel.
Because fossil energy consumption is displaced by the CHP system, the “fuel efficiency” analysis is used.

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Example:
A chemical supplier is building a factory for the manufacture of physical solvents for CO2 capture. The factory will produce
100,000 gallons of solvent. This volume will be input as the first term “# Units per year.” For the equations used above, the
physical solvent would represent a sub-component of a CCS “component” (the collection of sub-components required for the
full Carbon Capture and Sequestration (CCS) process). The “system” is the entire carbon emitting facility which is directly
impacted by, and fully encompassing of, the CCS process.
The second term, “Fractional Component Contribution” is used to calculate the value fraction of an end of supply chain
component that the manufactured solvent comprises. In this example the company purchases feedstock materials to process
the solvent. The “Fractional Component Contribution” represents the added value that the manufacturing process adds to the
final component price. If the feedstock costs $50 per unit volume, this volume is sold to downstream manufacturers for $500,
and the total “factory gate” price of a functional CCS apparatus is $5000 (per unit volume), then the “Fractional Component
Contribution” is (500–50)/5000 = 9%. Note: if, for example, 30% of the annual manufactured volume was sold for non-CCS
applications then the “Percentage SAEP” term would be 70% and the “Fractional Component Contribution” would be further
reduced accordingly.
The third term, “CO2eq Reduction per Unit” is used to calculate the annual CO2eq reduction which is enabled from incorporating only the full CCS component into a system under typical use patterns. In this example, the system emissions will be
reduced by 1000 Mtons per year per unit.
The fourth term, “Deployed Property Lifetime”, is the anticipated years of operation of the manufactured property over its
lifetime. In this example, the anticipated years of operation should be substantiated by providing information on likely solvent
replacement schedules. Note: if the sub-component lifetime is shorter than the expected lifetime of the component, then the
sub-component lifetime should be used for the “Deployed Property Lifetime”. The lifetime of the sub-component cannot be
longer than the lifetime of the component or system in which it is installed.
Renewable Fuel Refining or Blending: For SAEP to be used exclusively in the refining or blending of renewable fuels, the
following formulas shall be used to estimate the production of renewable fuel which is directly attributable to the annually
manufactured property. Specifically, the AAMC is the renewable fuel generation which can be attributed to one year’s worth
of production from the proposed project:

Where:

Example:
A pump manufacturer is building a factory for the manufacture of pumps specifically designed for renewable fuel refining
or blending. The factory will produce 10,000 pumps per year. This volume will be inputted as the first term “# Units per year.”
The second term, “Capacity per Unit” is the estimated annual volume of fuel refined or blended annually, which is enabled
by the pump under typical plant operations. For example, if a single pump is installed per biofuel refinery, the enabled capacity
is the annual refined or blended product from the biofuel refinery.
The third term, “Fractional System Contribution” is used to calculate the value fraction of an end of supply chain system
that the manufactured pump comprises. In this example the company purchases sub-components and materials to manufacture
each pump. The “Fractional System Contribution” represents the added value that the manufacturing process adds to the final
component price. If the sub-component and materials cost $5000 per pump, this pump is sold to a construction company for
$10,000, and the total price of the constructed refinery, the “system,” is $1M, then the “Fractional Component Contribution”
is (10,000–5000)/1,000,000 = 0.5%. Note: as per the requirement that no portion of such a project be used for the refining or
blending of non-renewable fuels, the “Percentage SAEP” term must be equal to 100% for such SAEP.
The fourth term, “Deployed Property Lifetime”, is the anticipated years of operation of the manufactured property over its
lifetime. In this example, the anticipated years of operation should equal the anticipated lifetime based on the planned service
schedule or warranty. The lifetime of the component cannot be longer than the lifetime of the system in which it is installed.

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Other Advanced Energy Technologies: For other technologies with the primary benefit of storing or transmitting renewable
energy, applicants should quantify the annual renewable energy generated and/or saved which is directly attributable to the
manufacture of their technology discounted by the likely fraction of their annual production which will be used for this purpose.
Although no generic equations are provided for this technology area, applicants should review the equations and methodology
above and transparently employ analogous calculations where possible and appropriate.
Impact on Air Pollution and Anthropogenic Emissions of Greenhouse Gases:
The DOE anticipates a wide variety of manufacturing proposals and thus no standard, all-encompassing approach will be used
to calculate pollutants and GHG emissions. Instead, the applicant is expected to quantify or discuss the pollutant and/or GHG
emissions associated with the full value chain manufacture, installation, operation, and end-of-life processes associated with
the SAEP attributable to the project.
To quantify the primary effects on CO2 emissions (“AAMC CO2 Reduction” as listed in the Applicant Data Input Spreadsheet),
the following four technology-specific approaches are used.
For Electricity Generation and Energy Conservation SAEP, the following equation is used to calculate the reduction in emissions of CO2 from the AAMC:
This calculation ignores CO2 emissions associated with the manufacture, installation, and end-of-life processes and assumes that
the dominant impact with respect to CO2 emissions is the offset consumption of average U.S. grid electricity. Where possible,
the applicant is expected to quantify or discuss CO2 emissions associated with the full value chain manufacture, installation,
operation, and end-of-life processes associated with the SAEP attributable to the project. The rationale for requiring a full value
chain assessment is to prevent the review process from advantaging the lowest energy manufacturing steps when all value chain
steps are required to realize any CO2 reduction.
For most Fuel Efficiency SAEP, a similar equation is used:

As with the previous energy types, applicants should, where possible, discuss the full value chain, life cycle emissions of CO2
associated with their manufactured property.
For Fuel Efficiency SAEP, such as EVs and PHEVs, which require the consumption of electricity to enable the full fuel efficiency, the following equation is used:

The “MWh/GGE” term is calculated by the applicant. As with the previous energy types, applicants should, where possible,
discuss life cycle emissions of CO2 associated with their manufactured property.
For Renewable Fuel Refining or Blending SAEP, the calculation is modified to account for CO2 emissions associated with the
manufacture of renewable fuel:

The “LCA” term is determined by the applicant by selecting the most relevant fuel and corresponding process from the “LCA
Fuel CO2 Assumptions” tab. Applicants must select the life cycle analysis (LCA) number which most closely corresponds
to their SAEP. If the applicant believes that the actual LCA emissions associated with the operation of the SAEP differs significantly from data provided, then the applicant may substantiate an alternative LCA number in their narrative. No further
discussion regarding CO2 emissions are required because emissions associated with installation, operation, and end-of-life processes associated with the SAEP are encompassed by the LCA number.
For GHG Emission Reduction SAEP, the AAMC is equivalent to the CO2 emission reduction and thus no additional calculations
are necessary.
The AAMC CO2 Reduction represents the total CO2 impact over the lifetime of deployed property which is attributable to
one year of manufacturing. This number is further adjusted in three ways to assess the magnitude of the CO2 reduction of
a given project. First, the normalized value of this reduction is assessed by dividing by the tax credit sought. Second, the
normalized AAMC CO2 Reduction is then divided by the deployed property lifetime to capture the CO2 impact after the first
year of SAEP deployment. Third, the normalized AAMC CO2 Reduction is multiplied by the projected factory lifetime. This
number calculates the total carbon impact over the lifetime of all deployed property over the lifetime of the factory. Because
this number will scale with the factory lifetime, the applicant should justify the claimed operational period of the factory in the
project narrative. All of these three AAMC CO2 Reduction figures will be used in the scoring of Evaluation Criteria 2.

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Technological Innovation and Cost Reduction:
Applicants must provide quantitative information regarding their project’s innovation and value. This information is captured
with the related metrics of technological or cost advantage over competitors, levelized cost, and the cost of CO2 abatement.
The preferred approach is for the applicant to discuss and quantify each of these three metrics. However, DOE recognizes the
difficulty associated with calculating levelized costs (and thus $/CO2) for many types eligible property. If the applicant is unable
to perform a levelized cost or CO2 abatement cost calculation for the SAEP then the applicant should provide a quantitative
or quantitative assessment of how their technological or cost advantage over competitors translates into system price savings,
improved performance, or improved system life.
Technological or Cost Advantage over Competitors: The applicant data sheet requires applicants to identify their “Technological or Cost Advantage over Competitors” with respect to the most relevant figure of merit. Ideally this is an apples-to-apples
comparison between similar property of similar function. For example, a wind blade manufacturer might compare the performance and cost of the proposed blade manufacturing to current commercially manufactured blades. Although high level
metrics such as levelized costs can capture this cost advantage, applicants are encourage to select a lower level metric (i.e. $/W,
$/Unit, efficiency, etc.) and later discuss the impact this granular cost advantage has upon the levelized cost. If the applicant’s
manufactured property has multiple advantages over currently manufactured property, the applicant should select and quantify
the most significant advantage in the Applicant Data Input Spreadsheet while discussing all technological and cost advantages
in their narrative.
Levelized Cost: The levelized cost of energy (LCOE) calculation should assume that the manufactured property is part of the
SAEP and where appropriate, be based on the financial and resource assumptions provided in Section H. This “improved”
LCOE value should be expressed in nominal terms and should not include any Federal, State or other financial incentives.
Further, plant and related cost values and prices of commodity fuels or feedstocks used in the calculation should reflect current
national wholesale averages where possible. The following information should be provided as documentation:

•
•
•
•
•
•

Brief description of the methodology used as the basis for the calculation. This methodology should be a commonly accepted industry standard.
Identification and brief rationale for the source of key values used in the calculation, including capital or first costs, operating
and maintenance costs, and prices of commodity fuels or feedstocks.
Justification for any use of a resource-related parameter (e.g., capacity factor) different than the national averages provided.
Explanation of any factors impacting the levelized cost that could not be quantified and included in the calculation, and
their potential directional effect on the resulting cost (i.e., increase or decrease).
Explanation of any relationship between the cost of the manufactured property and the performance of the end use energy
product.
If possible, an “unimproved” levelized cost calculation that does not reflect the input of the manufactured property (e.g.,
relies on the competitive standard of the day), based on the same financial and resource assumptions used in the “improved”
calculation.

Cost of Abatement: The form and units of the levelized cost vary across each energy type in the Applicant Data Input Spreadsheet. Thus, the cost of abatement equations are specific to each energy type to ensure consistent, accurate and comparable
abatement costs are produced by the Applicant Data Input Spreadsheet. For all energy types the cost of abatement reflects the
incremental cost and associated incremental reduction in carbon emissions from a baseline.
For Electricity Generation and Efficiency technologies the cost of abatement is calculated with the following equation:

The baseline ¢/kWh is defined by the retail electric rate of the electricity being generated or saved (i.e. residential, commercial,
or utility). The factor of 10 in the numerator provides dimensional consistency. For simplicity, all improved technologies are
assumed to non-carbon emitting.
For Fuel Efficiency technologies the cost of abatement is calculated with the following equation:
Incremental levelized cost / incremental emissions reduction:

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In this calculation, an incremental LCOE term is used to simplify the applicant’s data entry into the Applicant Data Input Spreadsheet. This term represents the difference in LCOE ($/GGE) costs between the baseline system and the improved system. The
specific calculation of this difference or increment will vary depending upon the fuel efficiency technology being considered.
The denominator represents the emissions reduction associated putting the improved system in place, principally in terms of its
displacement of the baseline technology.
For example, for a vehicle fuel efficiency technology, the incremental LCOE ($/GGE) may be calculated as:

In this case the $/Mile term represents the fully-burdened cost associated with each mile driven and includes factors such as depreciation. To calculate the incremental $/GGE, the applicant calculates the difference between baseline and improved $/GGE.
The denominator of the cost of abatement term is based on the “well to wheels” emissions associated with burning a GGE of
the consumed fuel. Applicants should show their work and reference Section H when calculating these values.
For other fuel efficiency technologies, such as a CHP application, the incremental LCOE ($/GGE) may be calculated as:

In this case, the $/BTU term represents the fully-burdened cost associated with each BTU of heat that the CHP system generates
as a by-product of the power generation. The cost of abatement denominator reflects the emissions avoided as a result of the
reduced consumption of the fuel that would have be burned to generate the heat now supplied by the CHP system.
For GHG Reduction technologies the cost of abatement is equivalent to the levelized cost (i.e., for these technologies, the
levelized cost is already expressed as the cost abatement) and thus no additional calculations are necessary.
For Renewable Fuel Refining or Blending technologies the cost of abatement calculation is analogous to the Electricity equations provided above:

In this case the traditional fuel is the fossil fuel not consumed. The term “Mtons/GGEtraditional” in the denominator is
similar to the denominator term in the fuel efficiency example provided previously. The second term in the denominator
“Mtons/GGErefined” accounts for the life-cycle (“seed to wheels”) carbon emissions associated with consumption of the
renewable fuel. This value is referenced from the “LCA Fuel CO2 Assumptions” tab based upon the applicant’s renewable
fuel type selection.
If an applicant cannot reasonably calculate a LCOE for the SAEP associated with the proposed manufactured property, the
applicant can instead provide an estimated cost of GHG emissions abatement. The applicant should provide and justify the
use of a cost value from a published study (e.g., McKinsey’s published 2009 report estimating global abatement costs) for a
comparable energy system.
If the applicant chooses to calculate a cost of abatement without a corresponding LCOE value for the SAEP, the basis of the
calculation is similar to that required in the LCOE calculation. For example, an applicant could calculate an incremental LCOE
by calculating the net present value of the incremental cost to the baseline system and dividing by the net present value of
the incremental performance improvement. This calculation should also be based on the financial and resource assumptions
provided and should be expressed in nominal terms and should not include Federal, State or other financial incentives. Further,
plant and related cost values and prices of commodity fuels or feedstocks used in the calculation should reflect current national
wholesale averages where possible. The following information should be provided as documentation:

•
•
•
•
•

Explanation of why an LCOE value either could not be calculated or was not appropriate to calculate for the end use energy
product.
Brief description of the methodology used as the basis for the calculation. This methodology should be a commonly accepted industry standard.
Identification and brief rationale for the source of key values used in the calculation, including capital or first costs, operating
and maintenance costs, prices of commodity fuels or feedstocks, and carbon emissions associated with the operation of the
end use energy product
Identification and brief rationale for the key values associated with the baseline energy mix, including the cost of generation
and carbon emissions.
Explanation of any factors impacting the cost of abatement that could not be quantified and included in the calculation, and
their potential directional effect on the resulting cost (i.e., increase or decrease).

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•
•

Explanation of any relationship between the cost of the manufactured property and the performance of the end use energy
product.
If possible, an “unimproved” cost of abatement calculation that does not reflect the input of the manufactured property (e.g.,
relies on the competitive standard of the day), based on the same financial and resource assumptions used in the “improved”
calculation.

Finally, if the applicant chooses to provide a cost of abatement value for the closest comparable end use energy product from a
published study, the following information should be provided as documentation:

•
•
•

•

Explanation of why an LCOE value either could not be calculated or was not appropriate to calculate for the end use energy
product.
Brief description of the methodology used in the cited study.
Identification of key assumptions used in the study, including the year basis for which the cost is reported (if the cost is
reported in real terms; e.g., $2008), the year of costs and prices of fuel commodities, the year to which the end cost value is
referenced (e.g., could be a future year), the extent of technology improvement assumed for the comparable end use energy
product, the regional extent of the baseline assumed (e.g., global, U.S., region of U.S.), the carbon emissions associated with
the baseline energy mix and the end use energy product, the key financial assumptions (e.g., interest rates, taxes, incentives
included), and the resource-related parameters (e.g., capacity factors).
Explanation of how the above assumptions differ from those provided above for guiding the calculation of the cost of
abatement, and the potential directional effect of these differences on the study’s cost value (i.e., if the aforementioned assumptions required for cost of abatement calculation had been used, would the study’s cost value likely have increased or
decreased).

V. SUPPORTING DOCUMENTS
The applicant should include such appendices as are applicable to the project. Examples of appropriate appendices include:

•
•
•
•
•
•
•
•
•
•

Copy of internal or external engineering reports.
Copy of site plan, together with evidence that applicant owns or controls a site. Examples of evidence would include a deed,
or an executed contract to purchase or lease the site.
Lists of all Federal, State, and local permits, including environmental authorizations or reviews, necessary to commence
construction.
Information supporting applicant’s conclusion that the site is fully acceptable as the project site for a manufacturing facility
and for its intended use.
A business plan which provides a description of the proposed project.
A financial plan for the proposed project.
Financial statements for the applicant and other project funding sources for the most recently ended three fiscal years, and
the unaudited quarterly interim financial statements for the current fiscal year.
Expressions of interest or commitment letters from equity and debt financing sources.
Expressions of interest or commitment letters from potential customers.
Off-take agreements.

H. Technical References for Advanced Energy Technologies Supplied Figures
This section is provided to assist the applicant in calculating the quantitative factors required in the project proposal.
Wherever appropriate, the applicant should use this information for baseline assumptions for estimating factors such as the
annual performance of the SAEP, expected lifetime of the deployed property and LCOE property. Additionally, in the
event that the applicant is unable to calculate the levelized cost or the cost of abatement, this information may be used as
inputs to the Applicant Data Input Spreadsheet.

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Table 1: Financial Assumptions for Levelized Cost of Energy Analysis
Common Financial Inputs for LCOE Analysis by Market Sector
Market

Buildings (grid-tied)

Central Generation

Residential

Commercial

Utility

Residential Mortgage

Commercial Loan

IPP and Utility

20
2.5%
5.5%

20
2.5%
5.5%

20
2.5%
7.5%

29%
7%
0
0
0

35%
7%
0
0
0

35%
8%
0
0
0

N/A
N/A

MACRS-Mid-Q
MACRS-Mid-Q

MACRS-Mid-Q
MACRS-Mid-Q

100%
30
6%

50%
15
6%

50%
20
6%

N/A
N/A
N/A

N/A
N/A
N/A

0
15%
1.4

N/A

N/A

No

Do not include

Do not include

Do not include

Financials
General
Analysis Period
Inflation Rate
Real Discount Rate
Taxes & Insurance
Federal Tax
State Tax
Property Tax
Sales Tax
Insurance
Depreciation
Federal
State
Loan
Loan (Debt) Percent
Loan Term
Loan Rate
Constraining Assumptions
PPA Escalation Rate
Target Internal Rate of Return
Target Minimum Debt Service
Coverage Ratio
Positive Cash Flow
Incentives
Federal, State, or Local Subsidies

Suggested LCOE Tools:
All Electricity Generating Technologies (general tool):
RET Finance: http://analysis.nrel.gov/retfinance/
The NREL Strategic Energy Analysis Center launched RET Finance in October 2001. It is an Internet-based cost of electricity
model that simulates a 30-year nominal dollar cash flow for a variety of renewable energy power projects. As an online
application, RET Finance is accessible from anywhere using an Internet connection and a browser. RET Finance calculates project
earnings, detailed cash flows, and debt payments and also computes a project’s levelized cost-of-electricity, after-tax internal
rate of return, and debt service coverage ratio.
Solar Technologies
SAM 3.0.3.0: https://www.nrel.gov/analysis/sam/
The National Renewable Energy Laboratory (NREL), in conjunction with Sandia National Laboratory and in partnership with the
U.S. Department of Energy (DOE) Solar Energy Technologies Program (SETP), developed the Solar Advisor Model (SAM)
in 2006. This version was last updated on July 24, 2009. The Solar Advisor Model evaluates several types of financing (from
residential to utility-scale) and a variety of technology-specific cost models for several (and eventually all) SETP technologies.
The SETP technologies currently represented in SAM include concentrating solar power (CSP) parabolic trough and dish-stirling
systems and photovoltaic (PV) flat plate and concentrating technologies. Other technologies will be added in future versions,
including CSP central receivers and residential solar water heating.

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Geothermal Technologies
Geothermal Electricity Technology Evaluation Model (GETEM): Posted on-line since July 31, 2009:
http://www1.eere.energy.gov/geothermal/getem.html.
The Geothermal Electricity Technology Evaluation Model (GETEM) was developed to aid the Geothermal Technologies Program
(GTP) in understanding the performance and the cost of the technologies it is seeking to improve. It is a detailed model of the
estimated performance and costs of currently available U.S. geothermal power systems. GETEM can be used to analyze and
evaluate currently available technologies and it can also be used to estimate what certain technologies might cost five to twenty
years in the future, given the direction of potential RD&D projects. The model is intended to help GTP determine which proposed
RD&D programs and projects might offer the most improvements for the taxpayer dollar.
Small Wind Technologies
www.nrel.gov/wind/docs/spread_sheet_Final.xls
Global Cost of Measured Reduction in Greenhouse Gas Emissions
Applicants may choose to use published report such as the McKinsey and Company. “Pathways to a Low-Carbon
Economy.” Version 2 of the Global Greenhouse Gas Abatement Cost Curve (2009). The report can be downloaded here:
http://www.mckinsey.com/clientservice/ccsi/pathways_low_carbon_economy.asp
(Based on Costs of the Full Supply Chain)9.

Table 2: Vehicle Assumptions
Metric

Value

Units

Annual Miles Traveled

12,000

Miles

Vehicle Lifetime Miles

160,000

Miles

2008 Average US Gasoline Price

$3.26

$

Baseline Vehicle Fuel Economy

23.4

mpg

$23,337

$

Vehicle Cost

Table 3: Common Service Life Years
Technology

Service Life Years

Solar Photovoltaics

30

Fuel Cell

20

Heat Pumps

7 to 20

Electric Water Heaters

20

Natural Gas Engine

20

Oil-Fired Engine

20

Natural Gas Turbine

20

NG Micro Turbine

20

9 Baseline data and abatement potential can differ slightly between this referenced global abatement study and the national studies previously published by McKinsey. National studies provide
a deeper view of the specifics of each respective country and to a much larger extent rely on national baseline data and other national statistics. Also, in national studies additional levers are
included which are particularly relevant in that country.

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Technology

Service Life Years

Wind

30

Electric Rooftop Heat Pump

15

Ground-Source Heat Pump

20

Suggested for non-distributed technologies

20

Assumption Tables to the EIA AEO, March 2009.
http://www.eia.doe.gov/oiaf/aeo/assumption/index.html

Table 4: Other Common Technical Assumptions and Baseline for Levelized Cost of Energy Analysis
Electricity Generation and Storage
End Use Energy Product (Technology)

Resource Characteristics

Biomass (general)

N/A

Geothermal

2

Capacity Factor 1
68%

200 deg C; 3000m depth

84%

N/A

85%

Wind

Class 5

39%

Wind — Offshore

Class 5

42%

Solar Thermal — CSP

Phoenix AZ

32%

Solar Photovoltaic (general)

Phoenix AZ

20%

Storage — CAES

N/A

25%

Storage — Pumped Hydro

N/A

25%

Storage — Adv. Batteries

N/A

25%

Storage — Flywheel

N/A

25%

Landfill gas utilization (general)

1

Generation — NREL Analysis estimates based on averages from multiple published sources; Storage — Input costs from
EPRI 2009 Overview of Electric Energy Storage Options for the Electric Enterprise
2 constant nominal price of $2.02/million Btu should be assumed to determine the fuel price contribution to the LCOE.
A
N/A — not applicable
If a natural gas price is needed to compute the LCOE of at technology, a constant nominal price of $4.66/ thousand cubic
feet should be used (based on EIA AEO 2009).

I. 48C Preliminary Application
This preliminary application will enable DOE to preview the types of forthcoming final applications to ensure that we establish
the relevant resources for an efficient and effective review process. Please provide brief responses summarizing the content in
your final applications. This preliminary application will not be included in the review of the final application as we understand
the final numbers might differ slightly from those in the preliminary application. However, you must use numbers that are as
accurate as possible, and we would appreciate the data here to be within 10% of the final data.

Applicant Information
Company Name
City
State
Qualified Investment $
Tax Credit Requested (30% of Qualified
Investment)

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Narrative Describing the Scope of the Project (300 words or less)

Applicant Checklist
Are you an eligible United States taxpayer?
Yes
No (do not continue with application)
Is your proposed project expected to:
Re-equip a manufacturing facility?
Expand a manufacturing facility?
Establish a manufacturing facility?
Is the manufacturing facility or proposed manufacturing facility in
the United States?
Yes
If yes, where is the manufacturing facility located or will the
manufacturing facility be located?

City
State

No (do not continue with application)
What is the SAEP that is attributable to your project?
Property designed to be used to produce energy from the sun, wind,
geothermal deposits (within the meaning of § 613(e)(2)), or other
renewable resources
Fuel cells, microturbines, or an energy storage system for use with electric
or hybrid-electric motor vehicles
Electric grids to support the transmission of intermittent sources of
renewable energy, including storage of such energy
Property designed to capture and sequester carbon dioxide emissions
Property designed to refine or blend renewable fuels or to produce
energy conservation technologies (including energy-conserving lighting
technologies and smart grid technologies)
New qualified plug-in electric drive motor vehicles (as defined by section
30D), qualified plug-in electric vehicles (as defined by section 30(d)), or
components which are designed specifically for use with such vehicles,
including electric motors, generators, and power control units
Other advanced energy property designed to reduce greenhouse gas
emissions as may be determined by the Secretary (If other, please specify)
J. Applicant Data Input Spreadsheet
This section is provided to give the applicant a depiction of the Applicant Data Input Spreadsheet, captured in the images on
the following pages.

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26 CFR 601.105: Examination of returns and claims
for refund, credit or abatement; determination of correct tax liability.
(Also Part 1, §§ 7701(i); 301.7701(i)–4.)

Rev. Proc. 2009–38
SECTION 1. PURPOSE
This revenue procedure provides the
conditions under which the Internal Revenue Service will not assert that certain
entities (or any portion thereof) created in
connection with the Public-Private Investment Program constitute taxable mortgage
pools for purposes of section 7701(i) of
the Internal Revenue Code.
No inference should be drawn regarding whether similar consequences would
obtain if a particular structure or transaction falls outside the limited scope of this
revenue procedure.
SECTION 2. BACKGROUND
.01 The Treasury Department has implemented a series of initiatives as part of
its Financial Stability Plan in connection
with the Emergency Economic Stabilization Act of 2008.
.02 One of these initiatives is the Public-Private Investment Program. Pursuant
to this program, the Treasury Department
will co-invest with private capital through
specific entities known as Public-Private
Investment Funds (Funds) to restore the
orderly functioning of financial markets.

2009–37 I.R.B.

The Funds will acquire certain commercial
mortgage backed securities and certain
non-agency residential mortgage backed
securities issued prior to 2009 that were
originally rated AAA (collectively, the
Legacy Securities). The Funds intend to
issue debt, secured by the assets acquired
by the Funds, including debt in one or
more sequential pay tranches, and equity.
.03 Section 7701(i) of the Code defines
the term “taxable mortgage pool” (TMP)
and provides that a TMP will be taxable
as a corporation. In general, a TMP is
any entity (other than a Real Estate Mortgage Investment Conduit (REMIC)) having the following qualifications: (i) substantially all of the entity’s assets consist of
debt obligations and more than 50 percent
of these are real estate mortgages, (ii) the
entity has issued its own debt obligations
with two or more maturities, and (iii) the
payments the entity makes as a debtor are
related to the payments the entity receives
as a creditor.
.04 The purpose of section 7701(i) is
to support the REMIC provisions found
in sections 860A through 860G. Congress
sought to make a REMIC the only arrangement capable of issuing multiple classes
of mortgage-backed securities without
the imposition of two levels of taxation.
H. Conf. Rep. No. 841, 99th Cong., 2d
Sess. II–239, 1986–3 (Vol. 4) C.B. 239.
Any arrangement that functions like a
REMIC but fails to qualify under section
860D is classified as a TMP.
.05 The application of the TMP rules
to entities that technically fall within their

362

scope is appropriately limited in certain
cases. See section 301.7701(i)–4(a) of
the Procedure and Administration Regulations. The Commissioner may also
determine that an entity not described in
section 301.7701(i)–4(a)(1) is not a TMP
if the entity has a purpose similar to that of
entities described in 301.7701(i)–4(a)(1).
Section 301.7701(i)–4(a)(3).
SECTION 3. SCOPE
This revenue procedure applies to:
.01 Any Fund (or portion thereof) that
holds Legacy Securities pursuant to the
Public-Private Investment Program, provided the U.S. Government owns a significant equity interest in the Fund;
.02 Any entity substantially all the assets of which are equity interests in either
a Fund described in section 3.01 or another
entity described in this section 3.02 (For
purposes of this section 3.02, U.S. Government securities held by a regulated investment company (RIC) or real estate investment trust (REIT) (or portion thereof) to
fund the income distribution requirements
contained in sections 852(a)(1), 857(a)(1),
860, 4981 and 4982 shall not be considered when determining whether substantially all the assets of an entity are, directly
and indirectly, equity interests in a Fund);
and
.03 Any portion of an entity which consists of an equity interest in a Fund described in section 3.01 or an entity described in section 3.02.

September 14, 2009