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Project Assets
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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| Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
| Project Assets |
PROJECT ASSETS
Project assets consisted of the following at December 31, 2012 and 2011:
In 2012, 2011 and 2010, the Company received $6,023,767, $6,695,711 and $812,489, respectively, in grant awards from the Treasury under Section 1603 of the 2009 American Recovery and Reinvestment Act. The Act authorizes the Treasury to make payments to eligible persons who place in service qualifying renewable energy projects. The grants are paid in lieu of investment tax credits. All of the cash proceeds from the grants were used and recorded as a reduction in the cost basis of the applicable project assets. If the Company disposes of the property, or the property ceases to qualify as a specified energy property, within five years from the date the property is placed in service, then a prorated portion of the Section 1603 payment must be repaid. For tax purposes, the Section 1603 payments are not included in federal and certain state taxable income and the basis of the property is reduced by 50% of the payment received. Deferred grant income of $7,590,730 and $6,024,099 in the accompanying consolidated balance sheets at December 31, 2012 and 2011, respectively, represents the benefit of the basis difference to be amortized to income tax expense over the life of the related property.
The Company has received cash rebates from a utility company, which were accounted for as reductions in the book value of the related project assets. The rebates were one-time payments based on the cost and efficiency of the installed units, and are earned upon installation and inspection by the utility. The payments are not related to, or subject to adjustment based on, future operating performance. The rebates were payable from the utility to the Company and are applied against the cost of construction, thereby reducing the book value of the corresponding project assets and have been treated as an investing activity in the accompanying consolidated statements of cash flows. The Company received a rebate of $1,287,000 during the year ended December 31, 2012. No rebates were received during the years ended December 31, 2011 or 2010.
Depreciation and amortization expense on the above project assets for the years ended December 31, 2012, 2011 and 2010 was $11,229,380, $9,701,399 and $9,634,891, respectively, and is included in direct expenses in the accompanying consolidated statements of income.
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