December 16, 2010

Senate passes extension of 1603 grant program

The U.S. Senate finally passed a one-year extension of the Section 1603 tax grant program in their tax bill compromise.  The United States Tax Grant Program (TGP), also known as 1603, has been the main driver for the strong growth of solar and has also helped keep wind installations going in the U.S. in 2010.

The Solar Energy Industries Association has been one of several renewable energy industry groups that have spoken out about the need for the tax grant’s passage.

“An extension will help the solar industry remain one of the fastest growing industries in America and create thousands of new careers,” said Rhone Resch, SEIA president. “With passage now complete in the Senate, it is critical that the House moves swiftly to pass this bill and send to the President for his signature. Tens of thousands of jobs depend on it.”

To date, 1,179 solar projects with total investments of over $1.3 billion in 42 states have been built with support from this program.  It's not exactly a long-term visionary energy policy -- but it will keep U.S. solar industry growth in high gear. And it will keep the U.S. wind industry afloat.

In 2009, the U.S. installed about 435 megawatts of solar. That doubled to about 1,000 megawatts in 2010 and many forecasts point to 2,000 megawatts installed in 2011.  Solar in the U.S. has more than doubled this year to approach or exceed 1,000 megawatts, in no small part due to 1603. The wind industry has struggled this year, but would have struggled even more were it not for the tax grants.

Certain factions in Washington, D.C. don't want to renew the tax grant. The catch is that the 1603 grant provision was actually passed during the Bush Administration. There is a sense that Republicans don't want to support anything with the scent of the American Recovery and Reinvestment Act (ARRA) upon it.

The bill now moves to the House where Rep. Lloyd Doggett (D-TX) is calling for the last-minute addition of the renewable energy extension (and ethanol credits).  If the bill passes the House without revisions, it will be ready for the President’s signature before Christmas.


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