Sun setting on renewable energy incentives

The treasury grant program has funded more than 1,000 solar projects. Photo credit: NREL, Harvey McDaniel

Three weeks. That’s how much time is left for a federal grant program that renewable energy groups say is critical to building new projects and creating jobs.

Trying to meet an end-of-the-year expiration date, the industry is in the midst of a last-minute push, urging lawmakers to extend the program for an additional two years.

“It’s simply the most important policy for continuing growth of renewable energy in the United States,” Rhone Resch, president and CEO of the Solar Energy Industries Association, said at a press conference Wednesday morning.

Specifically, the program is the 1603 Treasury Grant Program. Created in 2009 as part of the stimulus package, it allows project developers to receive a grant for 30 percent of a project's costs in lieu of a 30 percent investment tax credit.

“It’s one of the few ways we can access the financial market right now,” Denise Bode, CEO of the American Wind Energy Association, said of the grant program.

Since most renewable energy companies do not have profits they can offset with the tax credit, they sell the credits to so-called tax equity investors. But the tax equity market has largely dried up in the wake of the recession. 

“We still don’t have that equity market available," Bode said.

As of late November, the cash grant program has allocated more than $400 million to about 1,200 solar projects. Wind projects have received more than $4.5 billion. In total, the program has leveraged about $18 billion in investment in renewable energy projects about could create 65,000 jobs if extended, Resch said.

“I don’t want you to think of us as being desperate,” Resch said. “But companies out there are nervous. Their livelihood is at stake.”

To tap into the program, projects don’t have to be completed until 2016, but they must commence construction by the end of the year. On the ground, that means project developers are racing against the clock.

One of those is Silicon Valley-based solar cell maker SunPower. Last month, the company booked $100 million worth of projects to be built in 2011 and is hustling to start them in time to be eligible for the program, Julie Blunden, a SunPower executive, said Wednesday. 

“We’re racing to begin construction,” Blunden said. “We’ve got a pipeline full of jobs.”