End of incentive programs could be disastrous for solar industry

As 2010 wobbles to a close, so will numerous incentives for people and companies to install solar.

Solar groups and companies are working to extend solar incentives before they expire or run out of funding and warn that ending these programs now could cripple growth in an industry that already has created and could continue to create tens of thousands of real, new jobs throughout the United States at a time when it sorely needs to expand employment.

Programs like the Los Angeles Department of Water and Power’s solar rooftop grants program can’t keep up with demand.

According to the Los Angeles Times, the department budgeted $30 million for rooftop installations in 2010, but have already received requests for $70 million in rooftop solar grants.

The Tennessee Solar Institute, which was charged with distributing grants for solar installations in Tennessee, ran out of $9 million in funding in just three months, reported the Knoxville News Sentinel.

And federal programs like the U.S. Treasury’s 1603 grant program, is set to sunset Dec. 31, 2010. That program allows owners of commercial solar properties to get a grant instead of waiting to receive tax credits.

In fact, failure to extend grants under 1603, could shrink the entire renewable industry by 56 percent in 2011, according to study by the U.S. Partnership for Renewable Energy Finance as cited by the Solar Energy Industries Association (SEIA) during a recent press event.

“1603 lets you get all the incentive money back right away and allows for larger projects to attract the financing needed,” SEIA spokesperson Monique Hanis said.

The grant came along when the economy was down and investors who previously were interested in large-scale solar projects were looking elsewhere for investments.

But it’s not like solar is as prohibitively high it once was.

“The price of solar has continued to drop,” said Hanis. “It’s dropped another 50 percent or so in the past year, but the challenge that still remains are the up-front costs.” And 1603 was in place to ease some of those costs.

“There remains this challenge with financing and that’s what the Treasury program helped address,” she said.

She added that the program has proven successful and has supported about 1,100 projects in 41 states since the department started offering the grants.

“The thing is, its coming at a time when growth for solar is still strong, and it is forecasted to grow in 2010,” Hanis said.

Extending 1603 and other incentive programs could help the industry to keep growing into 2011 and creating more jobs, she said.

Image courtesy of NREL.