Kevin Bullis

A View from Kevin Bullis

Congress Extends Renewable Energy Grants

The extension could fuel continued growth in the solar industry.

  • December 17, 2010

Solar developers are breathing a sigh of relief this morning as they wake up to news that the House passed a big tax cut and stimulus bill last night, sending it on to the President for his signature, which is expected this afternoon. The bill, which extends Bush Era tax cuts, extends unemployment benefits, and cuts social security taxes, also extends a popular renewable energy grant program.

Yesterday evening, Lyndon Rive, CEO and founder of a solar financing, installation and maintenance company, Solar City, told me that the if the renewable energy program, which provides grants that cover 30 percent of the cost of solar installations, weren’t extended, “it would be a catastrophe for the entire industry.”

The U.S. Partnership for Renewable Energy Finance has been calling for the extension of the grant program since this summer, when it became clear that the recession would make it hard for solar projects to get financing under a related tax credit program.

The Section 1603 Treasury Grant program was enacted by Congress in 2009 as part of the American Recovery and Reinvestment Act to help address the impact of the financial crisis on the emerging U.S. renewable energy sector. Specifically, by providing tax grants in lieu of credits for qualifying renewable energy investments, the Treasury Grant Program has addressed a critical barrier to the continued flow of capital to renewable energy projects throughout the U.S. at a time when the economic downturn had begun to severely limit the use by investors of the tax credits that have traditionally played a central role in U.S. renewable energy policy incentives …

“If the Treasury Grant Program is allowed to expire in 2010, the level of capital that is available to finance renewable energy is anticipated to decline by more than 50%, jeopardizing the installation of clean renewable power projects throughout the US and our international competitiveness,” said Neil Auerbach, Co-Managing Partner of Hudson Clean Energy Partners.

Rive says that the tax grants are particularly important now that state incentives are starting to wind down, such as a California program that offsets the cost of rooftop solar installations. Under that program, the state aid decreases as sales of solar systems increase. He says that the decrease in incentives has been faster than the decrease in the cost of buying and installing solar panels.

Tech Obsessive?
Become an Insider to get the story behind the story — and before anyone else.
Subscribe today

Uh oh–you've read all five of your free articles for this month.

Insider Premium

$179.95/yr US PRICE

More from Sustainable Energy

Can we sustainably provide food, water, and energy to a growing population during a climate crisis?

Want more award-winning journalism? Subscribe and become an Insider.

  • Insider Premium {! insider.prices.premium !}*

    {! insider.display.menuOptionsLabel !}

    Our award winning magazine, unlimited access to our story archive, special discounts to MIT Technology Review Events, and exclusive content.

    See details+

    What's Included

    Bimonthly home delivery and unlimited 24/7 access to MIT Technology Review’s website.

    The Download. Our daily newsletter of what's important in technology and innovation.

    Access to the Magazine archive. Over 24,000 articles going back to 1899 at your fingertips.

    Special Discounts to select partner offerings

    Discount to MIT Technology Review events

    Ad-free web experience

    First Look. Exclusive early access to stories.

    Insider Conversations. Join in and ask questions as our editors talk to innovators from around the world.

  • Insider Plus {! insider.prices.plus !}* Best Value

    {! insider.display.menuOptionsLabel !}

    Everything included in Insider Basic, plus ad-free web experience, select discounts to partner offerings and MIT Technology Review events

    See details+

    What's Included

    Bimonthly home delivery and unlimited 24/7 access to MIT Technology Review’s website.

    The Download. Our daily newsletter of what's important in technology and innovation.

    Access to the Magazine archive. Over 24,000 articles going back to 1899 at your fingertips.

    Special Discounts to select partner offerings

    Discount to MIT Technology Review events

    Ad-free web experience

  • Insider Basic {! insider.prices.basic !}*

    {! insider.display.menuOptionsLabel !}

    Six issues of our award winning magazine and daily delivery of The Download, our newsletter of what’s important in technology and innovation.

    See details+

    What's Included

    Bimonthly home delivery and unlimited 24/7 access to MIT Technology Review’s website.

    The Download. Our daily newsletter of what's important in technology and innovation.

You've read of free articles this month.