U.S. Renewable Energy Investment and Jobs Threatened
Treasury Grant Program Will Expire 12/31/10 Without Immediate Congressional Action
Renewable energy finance experts warn of market cliff at end of 2010 if successful 1603 Treasury Grant Program is not extended, threatening U.S. energy security and jobs
Washington, DC; December 7, 2010 - Members of the U.S. Partnership for Renewable Energy Finance (US PREF), a program of the American Council On Renewable Energy (ACORE), warn that without extension of the 1603 Treasury Grant Program (TGP) during the 'lame-duck' session of the 111th Congress, the U.S. renewable energy market will contract and approximately 104,000 U.S. jobs will be at risk.
"The renewable energy industry is facing a crisis, a market cliff at the end of the year, requiring urgent Congressional action," said Michael Eckhart, President, American Council On Renewable Energy (ACORE). "The situation puts at risk thousands of jobs that were just created."
"The TGP has been highly effective in driving nearly $9 billion of new private sector investment in U.S. renewable energy projects," said Jeff Holzschuh, Vice Chairman of Morgan Stanley. "But policy uncertainty threatens the U.S. renewable energy market momentum and future growth. The investment community stands ready to do its part, but needs Congress and the Administration to act."
The TGP 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 grants in lieu of credits for qualifying renewable energy investments, the TGP has helped a growing industry overcome 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 had traditionally played a central role in U.S. renewable energy policy incentives. The TGP also has helped the U.S. increase its energy security.
Marshal Salant, Managing Director at Citi, added, "Without question, the TGP has been the most effective and successful national policy to promote renewable energy investment and deployment. With the financial crisis and associated economic downturn having greatly diminished the pool of investors able or willing to invest on the basis of tax benefits, continued access to the TGP is urgently needed to maintain investment in renewable energy projects, promote U.S energy independence and security, and protect and create U.S. jobs."
"The TGP has been a success story in supporting the growth of the U.S. renewable energy sector and in generating badly needed jobs for the U.S. economy," noted Pat Eilers, Managing Director of Madison Dearborn Partners. "Because of the TGP, wind power installations reached nearly 10 GW in 2009, exceeding the previous record of 8.3 GW set in 2008. By contrast, current policy uncertainty has led to a decline in the wind market by as much as 71% from last year's record. Without effective policy we are likely to see a continued decline in the U.S. wind market and, with it, the loss of jobs."
"The TGP created the impetus for nearly 3 megawatts of SolFocus CPV projects at colleges, primary schools, and agricultural businesses since the signing of ARRA," said Kelly Desy, of ACORE member SolFocus and Manager, Government Relations and Public Sector Business Development. "This in turn created immediate need for work in construction, as well as ongoing full time jobs and technical training opportunities for the expanding renewable energy workforce."
"Jobs are Americans' number one priority in 2010," said Lyndon Rive, CEO of SolarCity. "The Treasury Grant Program is undeniably creating jobs in a difficult economic environment. The solar industry has created 20,000 jobs since the 1603 program was created, and SolarCity has hired more than 500 workers in that time. If jobs are truly Congress' number one priority, they will extend the Treasury Grant Program."
The TGP has played a crucial role in supporting the U.S. renewable energy market. It complements the manufacturing tax credit (Section 48C) and the U.S. DOE loan guarantee programs. Each of these programs serves distinct and important market needs, promoting U.S. competitiveness, grid reliability and a more diverse national energy portfolio.