In 2009, the United States federal government converted a 30 percent tax credit for business owners who power their property with solar energy into a 30 percent treasury grant. What’s the difference? The property owners receive a check reimbursing them for 30 percent of the project’s cost within 60 days of completing the installation rather than waiting to use the tax credit against taxes they owe once a year.

The “Cash is King” approach worked, as it provided a stronger incentive for property owners to invest in such systems. As The New York Times reports, a property owner who installs a 500-kilowatt (KW) photovoltaic (PV) system on a 100,000-square-foot for $2.2 million would receive $660,000 back within that 60-day period. Up to the end of October 2010, the cash incentive had led to 1,118 solar energy installations and helped nearly doubled business investment in solar energy from $3.4 billion to $6.7 billion between 2008 and 2010.

But when the clock strikes midnight on New Year’s Eve, the party is over.

Congress is unlikely to extend the treasury grant option and, accordingly, it will revert back to a tax credit in 2011 and remain that way until 2016. This has left owners of commercial buildings scrambling to begin projects before the new year in order to take advantage of the cash offer. So many projects have sprung up recently that there are simply not enough of some solar energy system supplies to cover everyone’s needs.

Jamie Hahn, managing director of Solis Partners — a New Jersey-based solar project developer — says many manufacturing companies are having trouble keeping up with material demand. Specifically, PV panels and system inverters are on back order. Companies that don’t get to the current supply in time could be forced to wait as long as eight to 12 weeks for new supplies to arrive, far too late to take advantage of the treasury grant.

When the tax credit option returns, solar industry experts expect a sharp decrease in solar business installations. Most of the systems installed after the deadline will be by way of power purchasing agreements (PPAs), but even those are not as enticing as the treasury grant that makes it feasible for companies to outright own the system they install. Under a PPA, the solar installer owns and operates the system, and consequently receives all the tax credit and subsidy perks that come along with it.