What is Next for Renewable Energy Project Financing?

By Brian Seaman

Cleantech Law Partners

The Treasury § 1603 program was authorized in 2009 as part of the American Recovery and Reinvestment Act, and supported $38.6B of investment in renewable power development, and 16.9 GW of new installed renewable energy .  But with the 2011 expiration of the program – and the associated grants of up to 30% of qualifying project costs – developers, investors, and environmentalists are looking to the federal government to make minor, common-sense changes to current tax code to accelerate private investment in the renewable energy industry.  The most promising changes which have been proposed would affect existing investment vehicles like Master Limited Partnerships and Real Estate Investment Trusts.

Life After the 1603 Grant: The Road Ahead

In 2009, the federal government passed ARRA, and the 1603 Investment Tax Credit (ITC) cash grant program with it. The program effectively transformed what was traditionally an investment tax credit into a cash grant, awarded by the treasury, within 60 days of commercial operation. It was perhaps the single most important piece of legislation for solar in recent history that spurred huge growth in the sector, recently estimated to be 69 percent year over year. In January 2012, the 1603 ITC cash grant expired as did the ability for developers and investors to secure the cash grant in lieu of a tax credit.

SEIA and Solar Alliance merge to focus on state policy issues

The country’s top solar industry trade association announced Tuesday it is merging with an organization that advocates for solar energy at the state level.

The Solar Energy Industries Association (SEIA), which represents 1,100 solar companies around the country, said it merged with the Solar Alliance in order to focus more on state-level policy issues.

“The solar energy industry is expanding and it is critical for SEIA to mirror this growth and put our resources and expertise into developing state policy that expand markets for solar energy,” SEIA President Rhone Resch said in a statement.

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.

Senate bill would extend renewable energy programs

A key Senate Democrat is trying to get two programs aimed at boosting solar, wind and other renewable energy extended through the end of next year.

Sen. Max Baucus of Montana, chairman of the Senate Finance Committee, included the extensions as part of larger tax legislation he introduced Thursday.

The bill would extend a cash grant program for production of renewable energy. The program was created by the economic stimulus law and is set to expire at the end of this month.

Renewable energy producers have been pushing hard for the extension, calling it key to the industry's growth and job creation.