Continuing the Job Benefits of the Stimulus Bill

The U.S. PV industry was breathing again after a likely last minute extension of the highly successful Solar ITC as grant legislation (contained in the original ARRA bill) via inclusion in the tax extenders bill currently being debated on Capitol Hill. Known as the Solar Treasury Grant Program (STGP), it was due to expire at the end of December 2010. While the tax extenders bill still needs to be passed by Congress, the outcome looks positive.

Some history: the solar investment tax credit allowed entities with tax burdens to finance solar installations and receive a 30% tax deduction. This program was successful with banks and other entities with tax appetites until the recession and banking crisis set in during late 2008. With no tax burdens, all financing of solar projects came to a grinding halt. The ARRA bill’s STGP allowed solar project developers and their finance partners to receive the 30% as a cash grant – an enormous benefit – especially for loosening up hard to find construction financing from local bank providers.

The benefits to solar industry and the nation are substantial as noted by Rhone Resch, Executive Director of SEIA:

Solar Treasury Grant Program

STGP - Employment with Minimal Investment

“The 1603 tax credit has created flexibility for funding renewable energy projects and is fundamental for keeping the solar industry growing in America. To date, the program has facilitated the construction of more than 1,100 solar projects in 42 states. At a minimal cost to the tax payer, the 1603 program has supported $18 billion in investment in new renewable energy projects throughout the country and has created tens of thousands of jobs. Plain and simple, this program provides the greatest return on taxpayer dollars. The program has allowed the solar industry to grow by over 100 percent in 2010, create enough new solar capacity to power 200,000 homes and double domestic solar employment to more than 93,000 Americans. This program has created new opportunity for electricians, plumbers, and construction workers during the worst economic climate since the great depression.”

Of course, anytime we have talk of government subsidies for renewable energy, the free-market fundamentalists weigh in with their standard “clean energy should be able to compete on its economic merits without subsidies”.  When governments end exorbitant fossil fuel subsidies, I am all for ending clean energy subsidies.

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