Due to expire at year-end, a coalition made up of more than 750 clean energy companies, small businesses and other organizations on Nov. 30 sent a letter to Congress calling for legislators to extend the Treasury Dept.’s Section 1603 grant program for another year. The signatories represent organizations employing hundreds of thousands of Americans in the growing, increasingly diverse clean energy economy from all 50 states.
Enacted in 2008, the allows companies that invest in and develop clean energy projects to receive a cash grant in lieu of investment tax credits that would have increased their net income over a period of subsequent years. Front-loading and monetizing these investment tax credits has provided critical cash flow to these companies as they have struggled to recover from the collapse of the tax equity market that began with the 2008 economic crisis.
Treasury 1603 & Clean Energy Growth
The “” summarizes the effectiveness of the program in to Congress. Highlighting the “resounding success” of the program, the letter states, “Since its enactment, the program has leveraged over $22.8 billion in private sector investment to support over 22,000 projects utilizing a wide range of energy technologies in all 50 states.
“This has resulted in thousands of new American jobs…[It] allows taxpayers and small businesses to maximize the return and value of existing energy tax incentives, and is technology neutral so it encourages the development of a wide variety of domestic energy technologies.”
An conducted by EuPD Research for the (SEIA) determined that extending the Treasury 1603 grant program through 2012 would result in the creation of an additional 37,000 jobs in the solar energy industry alone in 2012, a 12% increase over baseline. Added cumulative capacity of clean, renewable solar power installed through 2016 would be 2,000 megawatts over baseline, enough to power 400,000 homes.
The letter also spells out the likely implications of Congress allowing it to expire on Dec. 31. “A July 2011 survey of the major tax equity investors by the U.S. Partnership for Renewable Energy Finance estimates expiration of the program would shrink the total financing available for energy projects by 52 percent in 2012. This would stifle job creation and severely restrict the markets ability to leverage private sector capital to finance new domestic energy projects,” the letter states.
Fighting for the Future of Clean Energy in the US
Clean energy industry execs are lobbying for their companies’ competitiveness, in some cases survival, playing against a house deck still stacked heavily in favor of fossil fuel production and consumption. Industry and business leaders representing solar, wind, biogas, combined heat and power (CHP) and fuel cells all came out with public statements calling for the extension of the Treasury 1603 grant program to help them compete on a more level playing field.
They’re not alone. A conducted by Kelton Research showed that just shy of 9 out of 10 Americans (89 percent) think its important for the United States to develop and use solar energy.
As Rhone Resch, president and CEO of the Solar Energy Industry Association (SEIA) stated in , The 1603 program was the single biggest driver of renewable energy deployment over the last two years, leveraging nearly $23 billion of private sector funding. Allowingit to expire at the end of the year, while tax equity markets remain limited, would have a severe impact on the few industries actually creating new American jobs in this economy.
Clean energy critics will slam this latest effort as another call to subsidize businesses that aren’t, and will never be, economically sustainable. Balderdash! An oil and fossil fuel industry oligopoly, including the most profitable companies in world history, continues to enjoy the benefits of even greater . furthermore, federal, state and local government