Bright skies for solar today, looming clouds tomorrow if 1603 isn’t extended

Solar Energy Industries Association (SEIA) and GTM Research on Dec. 14 unveiled their latest report on the solar industry “The U.S. Solar Market Insight: 3rd Quarter 2011,” showing the industry saw explosive year-over-year growth of 140 percent.

But the sunny news was clouded by the looming expiration of the Department of Treasury’s 1603 grant program, which unless Congress extends, expires Dec. 31.

The amount of solar installed through the third quarter of 2011 was more than 1,000 megawatts, more than the 887 megawatts installed in the full year of 2010, according to the report. Also, 449 megawatts—roughly 45 percent—was installed in the third quarter alone. Even higher amounts are expected for the fourth quarter of the year.

But the positive news was overshadowed by the potential expiration of 1603. Thus far the program has supported more than 22,000 projects with an average cost of $65,000, and it has leveraged $30 billion in private financing, according to SEIA Executive Director Rhone Resch. If extended into 2012, the program could create 37,000 new jobs in solar alone.

“This not a big tax credit for one large project that's going to be developed and building a pipeline from one part of Canada down to the Southern United States. This is a program that affects small businesses across the country, in all 50 states,” said Resch during a teleconference announcing the results and defending the program.

Employers like Tony Clifford, CEO of Standard Solar, would likely have to scale back their plans to hire more people in 2012.

“If you look at our employment growth, most of it has happened in the last two years. That is when the 1603 program was in effect. It’s definitely had a dramatic impact on our ability to create jobs,” he said. “If you talk about what we're looking at in 2012. We're planning to hire up to 25 to 30 employees.”

But that’s only if the program is extended.

“Ending this program is going to have a true dampening effect throughout the solar industry at every level. It's been a great jobs creation program. I urge Congress not to let this die,” Clifford said.

The 1603 grant program doesn’t require new funding from the federal government. It relies on existing tax breaks extended to renewable energy through 2016, money that’s already been accounted for.

To help support an extension of the 1603 program, SEIA has set up a petition where people can ask their representatives to support an extension of the program. You can access it here: 1603 Treasury Program Petition.