Installation of solar panels in the U.S. surged as much as 67 percent in the fourth quarter as developers raced to qualify for an expiring federal incentive program and panel prices fell 16 percent, a trade group said. Developers installed 700 megawatts to 750 megawatts of rooftop and ground-mounted systems in the quarter, compared with 450 megawatts in the third quarter, according to preliminary estimates from the Washington-based Solar Energy Industries Association.
Installations this year may grow by 3,000 megawatts to 4,000 megawatts, up from about 1,800 megawatts in 2011, if a U.S. Treasury Department incentive known as the 1603 program is renewed, said Rhone Resch, the trade group’s chief executive officer. Last year “was an incredible year and 2012 could be even better if Congress extends the grant program,” Resch said in an interview today.
President Barack Obama included 1603 in the proposed federal budget released yesterday and SEIA is lobbying to have it attached to the payroll tax extension Congress is debating now. The 1603 program offered cash grants of as much as 30 percent of development costs for renewable energy projects.
"America’s solar industry appreciates President Obama’s support for extending the 1603 Treasury Program," said Rhone Resch, President and CEO of the Solar Energy Industries Association (SEIA). "The 1603 program has helped leverage over $24 billion in private sector investment in for a wide range of clean energy projects, and extending the 1603 program will create an additional 37,000 jobs in the American solar industry in this year alone."
The 2008 economic crisis and the economy’s subsequent downturn drastically reduced the availability of tax equity, severely limiting the financing available for renewable energy projects. The Section 1603 Treasury Program, which was enacted in 2009 and extended in 2010, allows taxpayers to receive a federal grant in lieu of taking an existing energy tax incentive they are otherwise able to claim. This change to the timing of when an energy incentive can be claimed provides the liquidity needed for the further development of domestic energy projects. As the tax equity markets have not yet recovered, there remains a compelling need for the 1603 program.
Added Resch, "The lapse of the 1603 Program at the end of last year has had a detrimental impact. Small businesses and entrepreneurs who typically use this program and who would otherwise be hiring workers and starting new solar projects have been left in limbo. At a time when the nation’s economy is on the verge of recovery, now is not the time to walk away from smart, proven policies like the 1603 Program that create jobs and support small business growth."
Established in 1974, the Solar Energy Industries Association is the national trade association of the U.S. solar energy industry. Through advocacy and education, SEIA and its 1,100 member companies are building a strong solar industry to power America. As the voice of the industry, SEIA works to make solar a mainstream and significant energy source by expanding markets, removing market barriers, strengthening the industry and educating the public on the benefits of solar energy.
Administration Budget Website: www.whitehouse.gov/omb/budget
1603 Projects by State: www.seia.org/galleries/pdf/TGP-Awards.pdf
1603 Background Memo: www.seia.org/galleries/pdf/factsheet_Backgrounder_Success_of_1603_Treasury_Program.pdf
Job Creation from 1603 Extension: www.seia.org/galleries/pdf/EuPD_Full_Report_-_Economic_Impact_of_Extending_Section_1603_Treasury_Program_10.12.11.pdf