Late into the wee hours of Dec.16, the U.S. House of Representatives passed a bill extending the Bush era tax cuts and extending the 1603 Treasury Grant Program, which has provided grants that support the development of large solar and renewable energy projects. The program has been vital to the industry and to creating new jobs in an economy still struggling.
The House passed the measure by a vote of 277 to 148. Among those voting against it were 112 Democrats and 36 Republicans. The bill is being sent to the White House, and President Barack Obama is expected to sign it into law today (Dec. 17) at 3 p.m.
Following news of the House’s vote, Rhone Resch, president and CEO of the Solar Energy Industries Association (SEIA) issued a statement.
“After a year's worth of effort, we are now close to getting the 1603 Treasury Grant Program extended. I’d particularly like to thank Representatives Holt, Blumenauer and Thompson for providing leadership and vision in support of the renewable energy industry and the 1603 program,” he said.
SEIA spokesperson Monique Hanis said prior to extending the deadline, projects had to break ground by Dec. 31 2010 to be eligible. They now they have until the end of 2011, which can keep the momentum that's developed behind major utility-scale solar projects up.
"It gives solar a little more flexibility in financing their utility-scale projects, and it helps with the continued financing of solar projects," Hanis said.
The Treasury grants allow developers of large renewable energy projects to receive grants upon completion rather than waiting for a tax credit already in effect. It helps them achieve their return on investment quicker and making it more attractive from an investment standpoint and allows them to free up funds for future developments.
"Even though they don't get the tax credit until the project is finished, it helps them tremendously," she said.
“The extension would undoubtedly increase private capital flows to large-scale renewable energy projects in the United States next year,” said Cindy Eck, a program manager at the American Council of Renewable Energy. “The market has still not recovered sufficiently from the 2008 recession in order to thrive without government incentives such as the cash grant program.”
She called for continued federal support over the next several years and possibly beyond to keep momentum going in the renewables industry.
“The cash grant is also a crucial mechanism for keeping us competitive on a global level, and for US economic development,” Eck said.
SEIA has fought hard to extend the grant program.
“This program has successfully created thousands of jobs and opportunity in all 50 states for construction workers, electricians, plumbers, contractors that have struggled in this harsh economic climate,” said Resch. “An extension will help the solar industry remain one of the fastest growing industries in America and create thousands of new careers.”
The grant has been instrumental, so far, in supporting the U.S. renewable energy industry.
“[The grant program] has helped move forward more than 1,100 solar projects in 42 states and supported $18 billion in investment,” read the SEIA statement, which added that the grant program already provided employment for more than 93,000 Americans.
“It’s absolutely vital and enabling continued growth in the market the next year,” said Shayle Kann of GTM Research managing director of solar research and lead author of U.S. Solar Market Insight: 3rd Quarter 2010.
SEIA originally had fought for a two-year extension of the program and earlier this year commissioned a study from EuPD Research. The study found that a two-year extension of the Treasury Grant Program would create 67,000 jobs in 2015. The report also stated, “Cumulative U.S. investment (2010-2016) in solar electric technologies would increase by $21 billion.”
EuPD’s report also concluded that extending the grant would save the U.S. government money.
“When comparing 2010 and 2016 in terms of government stimulus, increased employment and the unemployment alternative we find that in five years the saved unemployment benefits and additional tax revenue are higher than the government stimulus.”
It said the net savings to the government through 2016 is expected to be $400,000 million if the program is extended.
CEA writer Amanda Miller contributed additional reporting for story.
Image courtesy of NREL.