Annual report pursuant to Section 13 and 15(d)

Project Assets

Project Assets
12 Months Ended
Dec. 31, 2015
Other Assets [Abstract]  
Project Assets
Project assets consist of the following: 
December 31,
Project assets


Less - accumulated depreciation and amortization
Project assets, net


For the twelve months ended December 31, 2015, 2014 and 2013, the Company received $0, $3,727 and $3,262, 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 $8,291 and $8,842 in the accompanying consolidated balance sheets at December 31, 2015 and 2014, 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. No rebates were received during the years ended December 31, 2015 and 2014.
Depreciation and amortization expense on the above project assets, net of deferred grant amortization, for the years ended December 31, 2015, 2014 and 2013 was $16,911, $15,047 and $12,595, respectively, and is included in cost of revenues in the accompanying consolidated statements of income (loss).