The House originally proposed eliminating funding for the program when it introduced H.R. 1. The extension of the programs helps renewable energy manufacturers and project developers secure private financing for their projects.
“With the program now secure, developers of solar power plants and manufacturing facilities have the policy certainty necessary to move forward with their projects,” said Rhone Resch, Solar Energy Industries Association President, in a press release. “The pipeline of clean energy projects with pending DOE loan guarantees will create more than 80,000 jobs and attract $35 billion in private investment, spanning a supply chain that stretches into 45 states.”
The 1705 loan-guarantee program already has provided loan guarantees to more than 20 clean energy projects. The loan guarantees have helped the project developers attract more than $40 billion in private investment, according to Resch.
“The 1705 program goes through the fiscal year of 2011,” said SEIA spokesperson Jared Blanton. Under the resolution, solar companies can apply for loan guarantees through Sept. 30, 2011. “They are good investments for taxpayers; they have a good return on investments,” he said.
A bipartisan group of Representatives sent a letter to House Speaker John Boehner (R-Ohio), urging him to support the program. A similar letter circulated in the Senate.
“We had bipartisan support in the House and Senate, Republicans in the House supported it,” Blanton said.
Republican Representatives including Brian Bilbray, Mary Bono Mack, Duncan Hunter—all from California—signed the letter.
“The projects that these loans would fund, in addition to creating over 25,000 jobs today, will help promote an industry utilizing cutting-edge technologies that will lay the foundation for America's long term competitiveness,” the Representatives, led by Laura Richardson (D-Calif.), wrote.
Other signers of the letter included California Democratic Representatives Jerry McNerney, Adam Schiff, Bob Filner and Grace Napolitano.
Both the loan guarantee program and the 1603 Treasury Grant program have been paramount to the expansion of large-scale solar projects that are seeking outside financing. The grant program was nearly killed at the end of 2010, but extended through 2011.
“The 1603 program got a big boost when it was included in Obama’s Fiscal Year 2012 Budget,” Blanton said.
SEIA will work hard to make sure it’s extended.
“The program is effective. It’s the most cost effective way to drive growth,” he said.
The 1603 grants are important because the tax equity finance market, which allowed investors to reap tax credits to offset tax liability, hasn’t fully recovered. The value created by the grants is a two-to-one return, according to Blanton.
“We’ll be working again with the same champions that we did last year to extend it,” he said.
Pictured: BrightSource’s new solar plant, which directly benefitted from the 1705 program. Image courtesy of DOE.