Time is quickly running out to use a powerful federal incentive aimed at greening residential and commercial properties.

The Department of Treasury’s federal renewable energy grant program, enacted as part of the American Recovery and Reinvestment Act of 2009, is scheduled to expire at the end of the year. To take advantage of the program, developers must either break ground on a project by December 31, 2010, or incur 5 percent of the total project cost by the end of the year and complete the building by the end of 2011. The grant applies to both new construction and retrofits and can go towards a variety of sustainable technologies including solar, fuel cells, wind turbines, and geothermal heat pumps.

Credit: Mostue and Associates

“The grant has been a tremendous success, helping with the adoption and investment of solar technology at a time when the market for tax credits and overall demand for capital improvements has been down,” says Mike Hall, CEO of Borrego Solar Systems, a San Diego-based solar installer. “If there’s a project that multifamily developers are contemplating or in the planning stages on and need [this] grant in order for it work, they need to accelerate the [development] time line.” While there is a slim chance that the grant program could be extended, Hall warns multifamily players not to count on it. “There seems to be some political will to extend the program, but it hasn’t happened yet,” Hall says.

That’s unwelcome news for the Chelmsford Housing Authority in Massachusetts. The housing authority is using the grant to help add a solar roof to one of its new seniors housing projects and would have liked continued funding to help green two existing buildings on the same campus.

“Based on the fact that I thought this grant was going to be around for a little while, we completely redid the whole roof on one of our older buildings to accommodate a solar panel installation next year or the year after. Now that will not be something we are moving towards without the funding,” says David J. Hedison, executive director of the Chelmsford Housing Authority.

But Hedison is grateful to use the grant to help fund CHOICE Center, a 37-unit, age-in-place community in Chelmsford, Mass., scheduled to open in April 2011. The design team switched from a standard pitched roof to a flat roof to accommodate the maximum number of solar panels. “Going green with mixed income is next to impossible if not impossible without some sort of incentive or assistance from the federal or state government. So for us, without that grant, we would not have been able to put in the solar system.”

Thanks to the grant, coupled with an additional green incentive, the housing authority is only paying $34,000 for the $252,000 solar system. “That is huge, almost too good to be true,” Hedison says. “With the system, we will be saving $10,000 a year on operating costs so the system will pay itself back pretty quickly. [After that], $10,000 invested back in the community could be mean additional supportive services for well over a dozen seniors.”