Renewable trade groups call for tax credit extension

The Honorable Harry Reid, 522 Hart Senate Office Building, Washington, DC 20510
The Honorable Mitch McConnell, 361A Russell Senate Office Building, Washington, DC 20510
The Honorable Nancy Pelosi, 235 Cannon House Office Building, Washington, DC 20515
The Honorable John Boehner, 1011 Longworth House Office Building, Washington, DC 20515

Dear Senator Reid, Madam Speaker, Senator McConnell, and Representative Boehner:

On behalf of the renewable energy industries in the U.S., we are writing in follow-up to our November 2nd letter to emphasize the urgency of extending the deadline for the renewable energy convertible tax credit provided under Section 1603 of H.R. 1. The start of construction deadline for this program expires at the end of this year and legislation introduced in both chambers would extend the program. If such legislation is not enacted this year, we will experience a significant slow down in the renewable energy industries, resulting in the loss of American jobs and further transfer of clean energy leadership to other countries. For example, preliminary numbers indicate that without an extension of the 1603 program, the wind industry alone will permanently lose one quarter of its budding workforce. The threat of these imminent jobs losses is why the renewable energy industries agree that of all financial incentives, an extension of the Section 1603 construction deadline is our primary priority during the lame duck session.

The Section 1603 convertible investment tax credit program has been extremely effective at keeping Americans working. At a time when the recession had brought project construction nearly to a halt, the Section 1603 program immediately restarted stalled projects and saved tens of thousands of corresponding jobs. This year, a study by Lawrence Berkeley National Laboratory found that the Section 1603 tax credit enabled hundreds of renewable energy projects to move forward and saved over 55,000 American jobs in the wind industry alone. In addition, a jobs census recently conducted by the Solar Foundation found that there are over 93,000 solar workers in the United States, roughly double the number estimated for 2009. Section 1603 was a key factor in this dramatic job growth.

Although there are signs our economy is improving, ongoing limitations in the tax equity market and sluggish economic growth are limiting renewable energy growth. As a result, the value of existing tax credits for renewable energy generation are uncertain and may not be sufficient to support even modest growth of the renewable energy market. An extension of the Section 1603 convertible investment tax credit would resolve these limitations.

If Congress acts to extend the construction deadline of the Section 1603 program, the renewable industries expect to see significant job growth as a direct result. With an extension, the wind industry expects to create 20,000 new jobs in 2011 over the business-as-usual scenario. Similarly, the solar industry will create 25,000 jobs next year and 40,000 new jobs in 2012 over the business-as-usual scenario if an extension is passed. Continued federal policy support for geothermal energy, including a Section 1603 extension, would lead to the creation of 11,200 jobs. The extension will also lead to the creation of thousands of jobs in the biomass and hydropower sectors.

We would appreciate your efforts to ensure that the extension of the construction date for the Section 1603 renewable energy convertible investment tax credit is included in the final tax bill that is considered this year. Thank you for your attention to this issue.


Denise Bode, CEO, American Wind Energy Association
Karl Gawell, Executive Director, Geothermal Energy Association
Rhone Resch, President & CEO, Solar Energy Industries Association
Bob Cleaves, President & CEO, Biomass Power Association
Linda Church Ciocci, Executive Director, National Hydropower Association

Tens of thousands of layoffs in American wind energy seen at stake in tax extender package

In the process of preparing year-end numbers on the industry, the American Wind Energy Association reports that tens of thousands of Americans could lose their jobs or not get called back from layoffs without the 1603 investment tax credit for renewable energy that hangs in the balance as Congress and the White House work to settle a tax package.

“We have people being laid off right now, and we expect to see more without fast action on the tax extenders now being negotiated,” said Denise Bode, CEO of AWEA. “The 1603 tax credit extension would help bring them back as soon as possible.” According to the trade group’s research, there are over 15,000 jobs in the manufacturing pipeline alone. “We are risking those jobs by not sending a clear signal that America remains open for business in wind energy,” Bode said.

The 1603 tax investment credit saved 55,000 jobs in wind energy, as estimated by Lawrence Berkeley National Laboratory. Overall employment has reached 85,000 in the American wind industry, as installed capacity has grown 40 percent in each of the past two years. Wind now generates 20 percent of the electricity in Iowa; and on Oct. 28, high winds pushed wind power to 25 percent of the electrical generation in Texas.

AWEA reported that:

The 1603 investment tax credit for renewable energy is providing critical manufacturing jobs and encourage economic investment in America at a crucial time. For example, just last Friday, a wind energy manufacturing plant was opened in Kansas which will employ close to 500 directly. This week Michigan announced its first plant to make large wind turbines, from 100% American parts. Other companies are already announcing additional plants and jobs in the area to supply these manufacturers.

–Without an extension of the 1603 program, AWEA expects to see the layoffs or failures to call back tens of thousands of Americans who will remain on the unemployment rolls, while we lose the technological and manufacturing race to China.

With the 1603 program we will keep our rural communities vibrant. each 1603 supported wind energy development pays thousands of dollars in lease payments to local landholders and in local taxes allowing more farm and ranch families to continue their way of life.

–Without the 1603 extension, we’ll see more rural Americans out of work and lose more of our family farms and ranches.

With the 1603 program we can reduce America’s dependence on foreign sources of energy and fossil fuels, which at the moment are increasing, not decreasing, in the energy mix. We need to diversify our energy portfolio and a tax credit is a good way to do so.

–Without a 1603 extension, American will become more dependent on unfriendly foreign counties for our energy, continue burning more fossil fuels, and make less domestic clean energy.

“We’re confident the White House and Congress understand the stakes for the extension of the 1603 tax credit for America’s economic competitiveness, manufacturing base, and domestic energy supplies,” Bode said. “We are powering the American way of life, and extending this successful tax credit is an important part of the unfinished business of this Congress.”

We need you to CALL your Senators and Representative IMMEDIATELY and ask them to only support a final tax bill that includes an extension of the 1603 Program. All Congressional offices can be reached through the U.S. Capitol switchboard at 202-224-3121.