Rhone Resch, president and CEO of SEIA said, "More than 100,000 Americans work in the solar industry, double the number in 2009. Solar is a proven job creator at a time when the unemployment rate for the country remains stubbornly high. The 1603 Treasury Program has been the single most effective policy driving renewable energy growth during the past two years."
The program was created in 2009 in the wake of the financial crisis, which drastically reduced the availability of tax equity financing for energy projects. The Section 1603 Treasury Program allows energy developers to receive a federal grant in lieu of claiming an existing energy tax credit. The program does not create any new incentives, but instead simply accelerates the timing of the existing credit. This solution was designed to provide the liquidity needed for the further development of domestic energy projects during difficult financial times.
The state of financial markets and the availability of tax equity are still woefully inadequate to meet demand for renewable energy projects. The program, set to expire on December 31, 2011, was intended to outlast the stagnant markets, which have proven more resilient than anticipated. Resch added, "At a time when President Obama and Congress are looking for solutions for America's jobs crisis, it would be unconscionable to allow this proven job-creating program to expire. Killing the 1603 Program amounts to a tax increase on the thousands of small businesses that are creating jobs in solar. The bottom line is that our capital markets are still in trouble and this program is needed today as much as it was when it was created. Allowing it to lapse would kill jobs and severely restrict the market's ability to leverage private sector capital to finance new domestic energy projects. Congress must extend the 1603 program to help the American economy."
In a background document released by SEIA, the organization indicated, "In a background document released by SEIA, the organization indicated, "The Solyndra bankruptcy is not indicative of the health of the U.S. solar industry and, as with any competitive and dynamic market, some companies will prosper and others will fail. Despite support from the federal government, Solyndra failed due to an unsustainable business model, as the company faced pressure from cheaper solar panels and simply could not compete in a high-tech, dynamic market. Competition in the solar industry is good for American consumers. It drives down costs, making solar affordable for more and more Americans every day.
The report indicates that, "The 1603 Treasury Program [TGP] was created to address the shortage of tax equity available to renewable energy projects due to the collapse of the financial markets. The TGP allows developers to receive a cash grant in lieu of the Section 48 Investment Tax Credit (ITC). The TGP has supported more than a thousand solar projects representing over $3 billion in total investment, contributing to a nearly two-fold increase in solar electric capacity in 2010.
Access a release from SEIA and links to the 43-page full report, executive summary and extensive background information (click here). [#Energy/Solar]