Obama Tax Deal Leaving Out Clean Energy, Putting Jobs at Risk

Thus far, 1,179 solar projects with total investments of $1.3 billion in 42 states have been built with support from an expiring program

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WASHINGTON—If President Obama’s final tax package doesn’t include grants for renewable energy projects, the industry expects hundreds or perhaps thousands of solar and wind workers to add to already-lengthy unemployment lines.

What’s known as the renewable energy convertible tax credit program—or the Treasury grant program—is set to expire by year’s end. And a plan submitted by Senate Finance Committee Max Baucus, D-Mont., to extend the program for a year died over the weekend.

Now leaders from all renewable energy fields are hoping legislators can reach some sort of compromise to keep jobs and projects from being jeopardized. Ideally, they are seeking a two-year extension of the grant program.

“This is not a program that has just benefited blue states,” Rhone Resch, president of the Solar Energy Industries Association, told reporters in a conference call Wednesday. “It’s a program that has benefited all states. They need to put their partisan bickering aside … to ensure that these industries continue to grow.”

For example, the solar industry added 1,000 megawatts of power in small, medium and large projects this year, Resch explained, adding that about two-thirds of the 1,100 projects counted on funding form the Treasury grant program. The 2,000 megawatts planned for 2011 could be slashed to 800 megawatts if the program isn’t extended

Thus far, 1,179 solar projects with total investments of $1.3 billion in 42 states have been built with support from the program.

In a letter to congressional leaders, Resch and his colleagues from the other renewable sectors said that extending the Treasury grant program will allow the wind industry to add 20,000 new jobs next year and the solar industry to create 25,000 jobs next year.

The same letter also pointed to a Lawrence Berkeley National Laboratory study showing that the tax credit program enabled hundreds of renewable energy projects to move forward and saved over 55,000 American jobs in the wind industry. In addition, a jobs census recently conducted by the Solar Foundation found that the nation has roughly 93,000 solar workers, about double the number estimated for 2009.

The relatively new Treasury grant program emerged as part of the Obama administration’s stimulus package. During the severe economic downturn of 2008, Resch explained, the renewable sector was dealt a “crippling blow” when the number of entities providing financial equity for renewable energy projects dropped 80 percent—from 27 to seven.

That tax equity market is still not strong enough, Resch added, to provide the volume of dollars needed to keep pace with the burgeoning growth of renewable projects. For 2011, he said, only $4 billion is available when developers need twice that amount.

“For this program to work, (the Treasury grant program) needs to be extended until the tax equity market rebounds,” he emphasized. “We’re not asking for permanent extensions … just two years.”

Word around Capitol Hill is that the Republicans are down on the Treasury grant program because they don’t want to renew anything birthed via the American Recovery and Reinvestment Act.

However, Denise Bode, chief executive of the American Wind Energy Association, pointed out that the grants were added to the stimulus package only after Congress realized the production tax credits that the Bush administration created were flailing because so many banks had failed during the recession.

“(These grants) give us the ability to compete on level playing field with the fossil fuels industry,” explained Denise Bode. Recent calculations comparing 2009 to this year reveal that fossil fuels are outgaining wind and solar in new energy generation—an edge that she says should go to renewables.

“Competitors in the energy sector get five times the support that the renewable sector gets,” she said about money directed toward oil and gas companies. “And that has been going on for 80 years. We have temporary support for a year or two and we never know if it will be extended.”

Both Bode and Resch say signals they are receiving from certain Democrats and Republicans are leaving them hopeful that they won’t be left out in the cold. For instance, Sens. Maria Cantwell, D-Wash., and John Ensign, R-Nev., are both rallying around the renewables cause.

“This is being characterized as a broad framework and the details are still being worked out,” she said about the shaping of the overall tax package. “We believe with the kinds of job losses and layoffs at risk, no one will no want to have new people in unemployment lines from the renewable energy sector.”

Bode emphasized that the Treasury grants program becomes even more vital because Congress hasn’t been able to pass a renewable electricity standard yet.

“Our CEOs are focusing on this completely,” Resch said about pushing for the two-year renewal. “It’s an all-out effort by all of the renewable industry.”

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