At press conference in New York, renewable energy finance experts discuss need for continued clean energy support and longer-term renewable energy finance scale-up from Federal government
New York, NY âEUR" June 29, 2010 âEUR" The American Council On Renewable Energy (ACORE) and the United States Partnership for Renewable Energy Finance (US PREF) jointly identified an impending gap in federal support for renewable energy projects at the close of 2010. At a press conference today at the Renewable Energy Finance Forum âEUR" Wall Street (REFF âEUR" Wall Street), top leaders from the financial industry discussed the anticipated post-stimulus landscape for renewable energy and expressed grave concern about potential deceleration and loss of jobs. In particular, the group called for extension of the 1603 Renewable Energy Treasury Grants, also known as the Grant in Lieu of Investment Tax Credit.
âEURoeThe renewable energy industry is facing a new double crisis: first, a âEURoestimulus cliffâEUR will occur as the ARRA provisions sunset, and, second, a drought of capital continues because the financial crisis has not ended,âEUR said Michael Eckhart, President, American Council On Renewable Energy. âEURoeIndeed, the financial crisis goes on, and if not addressed, the situation risks losing thousands of jobs that were just gained under ARRA.âEUR
With the financial crisis is likely to go on for another 1-2 years, the group agreed that the tax equity markets are likely to remain extremely challenging and lack depth to continue renewable adoption without a material fall off at the end of the year and the 1603 cash grant program, the loan guarantee programs, and manufacturing incentives will be needed to provide vitally important cash infusions and financing to project developers.
âEURoeThe project equity markets have not returned to their pre-crisis levels and the Recovery Act measures helped save the situation,âEUR said Patrick Eilers, Managing Director, Madison Dearborn Partners, who serves on the Board of Directors for U.S wind energy company First Wind. âEURoeFor example, with access to the ITC grants and other measures to help fill the finance gap, the U.S. wind industry saw a 39% increase in installed capacity in 2009. The uncertainty and volatility in the tax equity and credit markets make the grants program fundamental to developers that would otherwise be unable to commit risk capital to start to build projects.âEUR
âEURThe elimination of the Treasury Grant Program will cause a significant decline in the continuous development of renewable resources in the United States,âEUR added Jeffrey Holzschuh, Vice Chairman, Morgan Stanley.
âEURoeAll the clean energy sectors are at risk,âEUR said Neil Auerbach, Chair, US PREF, and Co-Managing Partner, Hudson Clean Energy Partners. âEURoeAs an example, solar installations are increasing and the development pipeline is growing, but financing is constrained. On the line are thousands of jobs, more than five gigawatts of clean energy capacity and billions of dollars in investment in the next five years. The stakes are high and we need to be able to get these projects to the finish line.âEUR
Identifying a number of federal programs at risk, the group agreed that stimulus programs are currently driving the market and pitched the need for extensions to maintain market activity. In addition to 1603, policies discussed were the 1703 and 1705 Loan Guarantee Programs, including the Financial Institution Partnership Program (FIPP), Production Tax Credits (PTC) and Investment Tax Credits (ITC). The group also discussed the importance of proposed policies to support the investment environment in the longer term, including renewable energy standard offer contracts and rates, a Clean Energy Deployment Administration (CEDA or âEURoeGreen BankâEUR) and pending climate and energy legislation.