Even so, we’d like to pause for a moment and extend our heartfelt thanks to those in Congress, AWEA member companies, our political allies across the spectrum, and our many supporters among the general public who helped us get this far. We are deeply grateful for, and inspired by, the outpouring of support that has come our way since it became clear earlier this week that the credits were not included in the initial tax proposal. Thanks so much.
We’ll be in touch with you during the next several days as the fate of the tax plan is sorted out, so please stay tuned in case another urgent call to action comes your way. And if you have not already done so, please contact your Representative and Senators through PowerOfWind.com and let them know that America’s competitiveness in clean, renewable energy is at stake and you will be watching and waiting for the outcome.
By Tom Gray, www.aweablog.org/
Tax Legislation Includes One-Year Extension For Treasury’s Popular Cash-Grant Program
The Treasury’s Section 1603 program, also known as the cash-grant program, will be extended for one year under the text of the tax bill introduced in the Senate Thursday night, according to the American Wind Energy Association (AWEA). A cloture vote on the tax bill is scheduled for Monday afternoon at 3 p.m.
"Factories across the country will restart production lines, recall workers and avoid layoffs that would have followed the loss of this key incentive for wind energy," says Denise Bode, CEO of AWEA. "With consistent policies like this one, wind energy can generate 20 percent of America’s electricity within 20 years and employ half a million Americans."
Sen. Dianne Feinstein, D-Calif., led a group of 17 senators in calling for the Treasury’s cash grant program to be included in tax legislation. The program is part of the American Recovery and Reinvestment Act and is responsible for $18.2 billion in clean energy investment. It is set to expire at the end of the year.
The senators wrote that they would have difficulty supporting tax legislation that failed to include an extension of the cash-grant program.
"The impact of this program on the clean energy economy has been enormous," the senators wrote. "A study by Lawrence Berkeley National Laboratory found the wind energy projects that were made possible by the [cash-grant program] were responsible for more than 55,000 jobs. Another study by EuPD Research, an independent consulting firm, projects a two-year extension of the [cash-grant program] would mean 65,000 more jobs in the solar industry and enough energy to power 1.2 million homes."
Senator Feinstein Leads 17 Senators in Forceful Call for Renewable Energy Grant Program Extension
U.S. Senator Dianne Feinstein (D-Calif.) today led a group of 17 senators in calling for the Treasury Grant Program to be included in tax legislation. The Treasury Grant Program, responsible for $18.2 billion in clean energy investment, will expire at the end of the year.
The senators write that they “will have difficulty supporting tax legislation currently being drafted for Senate consideration that fails to include an extension of the Treasury Grant Program.”
Below is the text of the letter sent by the 17 senators:
December 9, 2010
The Honorable Harry Reid The Honorable Max Baucus
Majority Leader Chairman
United States Senate Senate Finance Committee
Washington DC 20510 Washington, DC 20510
Dear Majority Leader Reid and Chairman Baucus:
We are writing to express that we will have difficulty supporting tax legislation currently being drafted for Senate consideration that fails to include an extension of the Treasury Grant Program (TGP). The Treasury Grant Program allows renewable energy developers to claim tax incentives directly. It is rightly credited with maintaining growth in the renewable energy sector in the midst of an economic downturn. If Congress allows taxes to rise on renewable development, momentum would be lost and the growth of renewable energy would be jeopardized.
The TGP has supported around $18.2 billion in clean energy investment to build 8,600 megawatts of renewable energy generation so far. To date, 1,465 projects have come online nationwide, and hundreds more have broken ground. As a result, our nation is slowly weaning itself off imported fuels, cleaning our air, reducing greenhouse gas pollution and creating jobs. In recent years the success of TGP has led to the creation of more wind energy capacity than any other type of power generation.
Furthermore, without the TGP, banks are able to extract a significant portion of the renewable energy tax credits’ value from renewable energy companies. A grant or direct pay program gives renewable energy companies 100% of the government support, instead of diverting much of the value into the already deep pockets of big banks.
The impact of this program on the clean energy economy has been enormous. A study by Lawrence Berkeley National Laboratory found the wind energy projects that were made possible by the TGP were responsible for more than 55,000 jobs. Another study by EuPD Research, an independent consulting firm, projects a two-year extension of TGP would mean 65,000 more jobs in the solar industry and enough energy to power 1.2 million homes.
Before the economic meltdown, developers were able to form “tax equity partnerships” with Wall Street banks to take advantage of clean energy tax incentives. But the banking crisis meant the $8 billion tax equity market seized up. The Treasury Grant Program is the only reason the renewable energy industry expanded instead of freezing.
Unfortunately, without the TGP or the creation of a direct payment option as proposed by Senator Baucus in the Middle Class Tax Cut Act of 2010, renewable energy development is forecast to dramatically suffer in 2011. A survey of all the leading banks that dominate the tax equity market shows that an expiration of TGP would result in a 56 percent decline in total financing available for renewable energy this coming year.
As you know, the TGP did not create a new federal incentive program. Instead, it allowed clean energy projects to make use of existing investment and production tax incentives. We ask for you to add an extension of the Treasury Grant Program, as proposed in the Renewable Energy Incentive Act, or the direct payment option as proposed by Senator Baucus in the Middle Class Tax Cut Act of 2010, to the final tax legislation considered by the Senate.
Thank you in advance for recognizing the urgency of growing the green energy economy.